Exercise 11-9 The Marigold Acres Inn is trying to determine its break-even point

Question

Exercise 11-9 The Marigold Acres Inn is trying to determine its break-even point during its off-peak season. The inn has S0 rooms that it rents at $125 a night. Operating costs are as follows Salaries Utilities Depreciation Maintenance Maid service Other costs $7,600 per month $1,300 per month $1,100 per month $500 per month $34 per room $66 per room Determine the inn's break-even point in number of rented rooms per month. Break-even point LINK TO TEXT LINK TO TEXT VIDEO, APPL EED SKILLS Determine the inn's break-even point in dollars. Break-even point Show Work is REQUIRED for this question: Open Show Work

Explanation / Answer

Contribution margin per unit Selling price per unit 125 less:Variable costs Maid service 34 Other costs 66 100 Variable cost per unit 25 total fixed cost Salaries 7,600 Utilities 1,300 Depreciation 1,100 Maintenance 500 total fixed cost 10,500 BEP(rooms) = total fixed cost/contribution margin per unit 10500/25 420 Rooms BEP in (dollars)            = 420 rooms * 125 52500 answer

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.