The San Marcos Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $50 a night. Operating costs are as follows.
Salaries ........... $8,500 per month
Utilities ........... 2,000 per month
Depreciation ......... 1,000 per month
Maintenance ......... 500 per month
Maid service ......... 5 per room
Other costs ........ 33 per room

Instructions
(a) Determine the inn’s break-even point in
(1) Number of rented rooms per month
(2) Dollars.
(b) 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
(2) The margin of safety ratio?