The Inn charges a room rate of $180 per night. The variable costs per room are estimatedto be $60 per night. Fixed costs for a month are as follows:Property taxes $ 550Insurance 320Salaries 4,250Depreciation 880Total fixed costs $ 6,0001. Using the information above, calculate the number of rooms necessary to be rented each month in order for the Inn to break even.2. Calculate the contribution margin ratio of renting a room. (XX.X) 3. What is the Inn's breakeven point in monthly revenue?4. If the Inn wanted to earn a monthly net income of $6,600, how many rooms would it have to rent each month?5. If the Inn rents 80 rooms this month, what is its safety margin…in rooms?in revenue?as a percentage of revenue? (XX.X)6. The Inn is facing some cost increases. As it looks right now, in a few months variable costs will increase by $5 per room, property taxes will increase by 2%. Insurance will be obtained from a new carrier and will be reduced by $31 per month. Salary increases will be considered at a later time. Given these changes, how many rooms would the Inn have to rent each month in order to break even?

The Inn charges a room rate of $180 per night. The variable costs per room are estimatedto be $60 per night. Fixed costs for a month are as follows:Property taxes $ 550Insurance 320Salaries 4,250Depreciation 880Total fixed costs $ 6,0001. Using the information above, calculate the number of rooms necessary to be rented each month in order for the Inn to break even.2. Calculate the contribution margin ratio of renting a room. (XX.X) 3. What is the Inn's breakeven point in monthly revenue?4. If the Inn wanted to earn a monthly net income of $6,600, how many rooms would it have to rent each month?5. If the Inn rents 80 rooms this month, what is its safety margin…in rooms?in revenue?as a percentage of revenue? (XX.X)6. The Inn is facing some cost increases. As it looks right now, in a few months variable costs will increase by $5 per room, property taxes will increase by 2%. Insurance will be obtained from a new carrier and will be reduced by $31 per month. Salary increases will be considered at a later time. Given these changes, how many rooms would the Inn have to rent each month in order to break even?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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