Kimmel, Accounting, 6e Exercise 18-9 The Paimer Acres Inn is trying to determine

Question

Kimmel, Accounting, 6e Exercise 18-9 The Paimer Acres Inn is trying to determine its break even point during its off-peak season. The inn has s0 rooms thot a rents t 58 a ight Operating cots are a 5,500 per month 1,200 per month $ 1,300 per month $ 4,325 per month Maid service Other costs 10 per room 19 per room Determine the inn's break-even point in number of rented rooms per month Break-even point Determine the inn's break-even point in dolas Break-even port Click if you would like to Show Work for this questiom 9 8: 6 ERTYUO DFG HJ KL

Explanation / Answer

Break even point = Fixed cost/contribution margin per unit

Fixed cost = (5500+1200+1300+4325) = 12325

Contribution margin per unit = (58-10-19) = 29 per unit

Break even point = 12325/29 = 425 rooms

Break even dollar sales = 425*58 = $24650

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