10 May DETERMINE THE INN’S BREAK-EVEN POINT IN (1) NUMBER OF RENTED ROOMS PER MONTH AND (2) DOLLARS.
The Motor Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $100 a night. Operating costs are as follows. Salaries $10 600 per month Utilities 2 400 per month Depreciation 1 500 per month Maintenance 800 per month Maid service 5 per room Other costs 45 per room(a) Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. (a)(1) Break-even point in rooms Rental per room Variable cost per room Contribution margin per room Fixed costs Contribution margin per room Break-even point in rooms(a)(2) Break-even point in dollars Contribution margin per room Rental per room Contribution margin ratio Break-even point in rooms Rental per room Break-even point in dollars OR Fixed cost contribution margin ratio Break-even point in dollars
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