WileyPLUS e Chegg Study | Guided So × X . ? ? Secure | https://edugen.wileyplus.

Question

WileyPLUS e Chegg Study | Guided So × X . ? ? Secure | https://edugen.wileyplus.com/edugen/lti/main.uni Assignment Open Assignment CALCULATOR PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Exercise 19-1 The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $52 a night. Operating costs are as follows. Salaries Utilities Depreciation Maintenance Mald servlce Other costs $9,900 per month 2,000 per month 1,600 per month 900 per month Rrief Fxercise 19-5 Brief Exercise 19-6 6 per room 28 per room Determine the Inn's break-even polnt In (1) number of rented rooms per month and (2) dollars. 1. Break-even point In rooms 2. Break-even point rief Brief Exercise 19-13 9- xercise 19 Objective 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? (Round ratio to 0 decimal places, e.g. 10.) 1. Margin of safety 2. Margin of safety ratio 3:35 PM 6/11/2018 2

Explanation / Answer

1st part:

working:

break even point in rooms = total fixed cost / contribution per room

here,

total fixed cost = 9900+2000+1600+900 =>14,400

contribution per room = sale price - variable costs =>$52 - 6 - 28 =>$18.

now,

break even point in rooms = $14400 / 18 =>800 rooms

break even point in dollar sales = break even point in rooms * rent per night =>800*$52 =>$41,600.

2nd part:

margin of safety = budgeted sales - break evensales

here, budgeted sales = 50 rooms per day * 30 days * $52 =>$78,000.

margin of safety=>78,000 - 41,600 =>$36,400.

margin of safety % = (budgeted sales - break evensales ) / break evensales *100

=>36,400 / 78,000 *100

=>47%......(rounded to zero decimal places)

1.break even point in rooms 800 rooms 2.break even point $41,600

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

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