E6-1 The San Marcos Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $50 a night. Operating costs are as follows: Costs Amount Salaries $8,500 per month Utilities 2,000 per month Depreciation 1,000 per month Maintenance 500 per month Maid service 5 per room Other costs 33 per room
(a) Determine the inn’s break-even point in 1. Number of rented rooms per month and 2. Dollars
(b) 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
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