The Soma Inn is trying to determine its break - even point, The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows.

Salaries..............................$10,600 per month

Utilities............................. 2,400 per month

Depreciation..................... 1,500 per month

Maintenance..................... 800 per month

Maid service..................... 8 per month

Other costs....................... 34 per month

Instructions

(a) Determine the inn's break-even point in (1) number of rented rooms per month and (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 and (2) the margin of safety ratio?