Question

Exercise 5-9 (Video) The Sunland Acres Inn is trying to determine its break-even point during its off-peak season. The Inn has 50 rooms that it rents at $65 a night. Operating costs are as follows: Salaries $6,500 per month tes $1,300 per month Depreciation $1,200 per month Maintenance $1,764 per month Mald service $13 per room Other costs $26 per room Determine the inn's break-even point in number of rented rooms per month Break-even point rooms LINK TO TEXT LINK TO TEXT Determine the inn's break even point in dollars. Break-even point in Click If you would like to Show Work for this question: Open Show Work UNK TO TEKT LINK TO TEXT VIDEO SIMILAR EXERCISE

Answer 1

	Computation of Fixed costs
	Salaries	$6,500
	Utilities	$1,300
	Depreciation	$1,200
	Maintainance	$1,764
	Total Fixed costs	$10,764
	Contribution statement
	No. of Rooms	50	rooms
	Sales per night	$65
Less:	Variable cost per room($13+$26)	$39
	Contribution margin per room	$26
	Contribution margin %($26/$65)	40%
	Break even point in rooms($10,764/$26)	414	rooms
	Break even point in $($10,764/40%)	$26,910