This is specifically Management Accounting.

2-46 Income Taxes on Hotels Study Appendix 2B. The State Street Hotel in downtown Chicago has annual fixed costs applicable to rooms of $10 million for its 600-room hotel, average daily room rates of $95, and average variable costs of $15 for each room rented. It operates 365 days year. The hotel is subject to an income tax rate of 40%. 1. How many rooms must the hotel rent to earn a net income after taxes of $1,200,000? 2. Compute the break-even point in number of rooms rented. What percentage occu- 3. Assume that the volume level of rooms sold is 150,000. The manager is wondering of $360,000? pancy for the year is needed to break even? how much income could be generated by adding sales of 15,000 rooms. Compute the additional net income after taxes