The Sheridan Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $ 56 a night. Operating costs are as follows.

Salaries	$ 9,650	per month
Utilities	2,700	per month
Depreciation	1,500	per month
Maintenance	850	per month
Maid service	8	per room
Other costs	34	per room

(a)

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Determine the inns break-even point in (1) number of rented rooms per month and (2) sales dollars.

1.		Break-even point in rooms		enter a number of rooms per month
2.		Break-even point in dollars		$ enter a dollar amount per month	per month

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Solution

Attempts: 2 of 2 used

(b)

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If the inn plans on renting an average of 50 rooms per day (assuming a 30-day month), what is (1) the monthly margin of safety in dollars and (2) the margin of safety ratio? (Round ratio to 0 decimal places, e.g. 10%.)

1.		Margin of safety		$ enter a dollar amount
2.		Margin of safety ratio		enter percentages rounded to 0 decimal places	%