PLEASE HELP 2-11 The Country Fields Retirement Community charges $6,000/month fo

Question

PLEASE HELP

2-11 The Country Fields Retirement Community charges $6,000/month for a single senior citizen to reside in an efficiency apartment with assisted living care. The facility has operating expenses of $600,000 per month. Staffing levels are dependent on the number of residents. Each senior who enters the community requires additional food, personal care, and support staff time. The estimated cost for each person is $4000 per person per month. (a) How many senior citizen residents does the facility need to have in order to reach the breakeven point? (h) What is the company's annual profit or loss if they maintain an average residency level of 350 senior citizens?

Explanation / Answer

A) To break even =X :

6000 * X = 600000 + 4000X

So, 6000X-4000X = 600000

so, X(break even) = 300 senior citizens

B) if 350 Senior citizens,

350 *6000 - (600000 + 4000*350) = $ 2100000 - 2000000 = $100000

Thanks

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