Question
The Motor Inn is trying to determine its break-even point.The inn has 75 rooms that are rented at $100 a night.Operating costs are as follows.
The Motor Inn is trying to determine its break-even point.The inn has 75 rooms that are rented at $100 a night.Operating costs are as follows.
Salaries $10,600 per month
Utilities 2,400 per month
Depreciation 1,500 per month
Maintenance 800 per month
Maid service 5 per room
Other costs 45 per room
(a) Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars. (a)(1) Break-even point in rooms Rental per room Variable cost per room Contribution margin per room Fixed costs Contribution margin per room Break-even point in rooms
(a)(2) Break-even point in dollars Contribution margin per room Rental per room Contribution margin ratio Break-even point in rooms Rental per room Break-even point in dollars OR Fixed cost contribution margin ratio Break-even point in dollars
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started