Help please! SOURCES Exercise 19-1 The Soma Inn is trying to determine its break

Question

Help please! SOURCES 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 $9,900 per month 2,000 per month 1,600 per month 900 per month y Study Depreciation 6 per room Maid service Other costs 28 per room Determine the inn's break-even point in (1) number of rented rooms per month and (2) dollas 1. Break-even point in rooms 2. Break-even point s (3) the monthly margin of safety in dollars and (2) the margin of safety If the inn plans on renting an average of 50 rooms per day (assuming a 30-day month), what ratio? (Round ratio to 0 decimal places, o.g. 10.) 1. Margin of safety 2. Margin of safety ratio TO TEXT SAVE FoR LATER Question Attempts: 0 of 5 used

Explanation / Answer

Fixed cost Salaries 9900 Utilities 2000 Depreciation 1600 Maintenance 900 Total 14400 Variable cost Per room Maid service 6 other costs 28 Total variable cost 34 Sales 52 Less Variable cost 34 Contribtion margin 18 1 Breakeven in rooms = Fixed cost / contribution margin per room Fixed cost 14400 Contribtion margin 18 Break even in rooms 800 Rooms 2 Breakeven in dollars = Breakeven in rooms * room price per night Break even in rooms 800 Room price 52 Breakeven in dollars 41600 3 Actual sales 78000 (50*52*30) Breakeven sales in dollars 41600 Margin of safety 36400 Margin of safety ratio = Margin of safety / actual sales Margin of safety 36400 Actual sales 78000 Margin of safety ratio 47%

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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