per room Salaries $8,500 per month Utilities 2,700 per month Depreciation 1,500
ID: 2433183 • Letter: P
Question
per room
Salaries $8,500 per month Utilities 2,700 per month Depreciation 1,500 per month Maintenance 800 per month Maid service 7 per room Other costs 31per room
Exercise 19-1 The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. Salaries Utilities Depreciation Maintenance Maid service Other costs $8,500 per month 2,700 per month 1,500 per month 800 per month 7 per room 31 per room Your answer is partially correct. Try again Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollars. 1. Break-even point in rooms 750 2. Break-even point 27551 LINK TO TEXT ?Your answer is incorrect. Try again. 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 O decimal places, e.g. 10.) 1. Margin of safety 56449 2. Margin of safety ratio LINK TO TEXTExplanation / Answer
Answers
Rent per room
$ 56.00
Variable costs per room:
Maid Service
$ 7.00
Other costs
$ 31.00
Total variable cost per room
$ 38.00
Total contribution margin per room
$ 18.00
Salaries
$ 8,500.00
Utilities
$ 2,700.00
Depreciation
$ 1,500.00
Maintenance
$ 800.00
TOTAL Fixed Costs
$ 13,500.00
A
TOTAL Fixed Costs
$ 13,500.00
B
Total contribution margin per room
18
C = A / B
Break Even point in room
750
D
Rent per room
$ 56.00
E = C x D
Break Even point in $
$ 42,000.00
A
Rooms rented per month
1500
B [Calculated above]
Break Even point in room
750
C =A - B
Margin of Safety in rooms rented
750
D
Rent per room
$ 56.00
E= C x D
Margin of Safety in $
$ 42,000.00
F = A x D
Total Revenue from rooms rented
$ 84,000.00
G = (E/F) x 100
Margin of Safety ratio
50%
Rent per room
$ 56.00
Variable costs per room:
Maid Service
$ 7.00
Other costs
$ 31.00
Total variable cost per room
$ 38.00
Total contribution margin per room
$ 18.00
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