Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
The Soma 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. $10,000 per month Salaries 2,100 per menth Utilities Depreciation 1,500 per month 800 per month Maintenance 7 per room Maid service 31 per room Other costs Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars 1. Break-even point in rooms 2. Break-even point 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management A Strategic Emphasis

Authors: Edward Blocher, David E. Stout, Gary Cokins, Kung Chen

4th Edition

0073128155, 978-0073128153

More Books

Students also viewed these Accounting questions

Question

Describe five of G. Stanley Halls major achievements.

Answered: 1 week ago