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The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $52 a night. Operating costs are
The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $52 a night. Operating costs are as follows.
Salaries | $9,400 | per month | |
Utilities | 2,700 | per month | |
Depreciation | 1,400 | per month | |
Maintenance | 900 | per month | |
Maid service | 6 | per room | |
Other costs | 28 | per room |
Determine the inns break-even point in (1) number of rented rooms per month and (2) dollars.
1. | Break-even point in rooms | |||
2. | Break-even point | $ |
eTextbook and Media
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 | $ | |||
2. | Margin of safety ratio | % |
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