A.
Break-even Analysis: It refers to an analysis of the level of operations at which a company experiences its revenues generated is equal to its costs incurred. Thus, when a company reaches at its break-even, it reports neither an income nor a loss from operations. The formula to calculate the break-even point in sales units is as follows:
To compute: Company M’s break-even number of accounts.
B.
To compute: the average weekday profit
C.
To compute: the average weekend day profit
D.
To compute: Company M’s revised break-even number of accounts.
E.
To Explain: Whether the company will still remain profitable for an average weekday under the scenario in (D).
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Chapter 19 Solutions
Financial & Managerial Accounting
- Wild-Water Works Water Park provides for a fun day by offering a variety of rides. Wild-Water Works Water Park sells tickets at $74 per person as a one-day entrance fee. Variable costs per person are $34 and fixed cost amount to $222,300 per month.Wild-Water Works Water Park expects to sell 7,900 tickets. Find break-even first, then compute the margin of safety in tickets and sales in dollars.arrow_forwardNeed help with this accounting questionarrow_forward↑ Suppose River Valley Lodge incurs $70,000 of fixed costs each month Compute the (a) total fixed cost and (b) fixed cost per guest if the hotel has 14,000 guests next month. Compare the fixed cost per guest at the higher occupancy rate to the fixed cost per guest when only 1,500 guests stay during the month. (a) Compute the total fixed cost if the hotel has 14,000 guests next month. Total fixed costs to wide changes in volume, therefore, total fixed costs will (b) Compute the fixed cost per guest if the hotel has 14,000 guests next month. First, identify the formula to compute the fixed cost per guest, then compute the foxed cost per guest at (1) 14,000 guests and at (2) 1.500 guests (Round the fixed cost per quest to the nearest cent.) Fixed cost per quest Nextarrow_forward
- Determine the inn's break-even point in dollars. Break-even point in $ The Ivanhoe Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $55 a night. Operating costs are as follows: Salaries $5,700 per month Utilities $1,000 per month Depreciation $1,300 per month Maintenance $1,240 per month. Maid service $11 per room A Other costs $22 per room. Determine the inn's break-even point in number of rented rooms per month. Break-even point roomsarrow_forwardProvide answer the accounting question with step by step calculationarrow_forwardAnswer all <>arrow_forward
- The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. Salaries Utilities Depreciation Maintenance Maid service Other costs $10,600 per month 2.600 per month 1,400 per month 700 per month 7 31 per room 2 Determine the inn's break-even point in (1) number of rented rooms per month and (2) dlars. per room Break-even point in rooms Break-even pointarrow_forwardAnalyze Pacific Airways Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows: Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of 180. Assume Pacific Airways is considering a new service that would provide tickets at half price. Passengers would need to fly standby to receive the discount, but would be provided a flight for a given day of travel. An analysis revealed that an average of 8 existing passengers would use the new discounted tickets for travel. In addition, 15 new passengers would be attracted to the offer. a. Determine the contribution margin per passenger for the full-priced ticket. b. Determine the break-even number of seats sold per flight. c. Determine the contribution margin per passenger for discounted tickets. d. Should Pacific Airways offer the discounted ticket plan? Answer the question by computing the incremental contribution margin per flight for the plan.arrow_forwardAnu's amusement center has collectd..accounting questionsarrow_forward
- Please help mearrow_forward1. Prepare the company's contribution margin income statement for the month of April. Round all figures to the nearest dollar. 2. Assume that passenger volume increases by 12% in May. Which figures on the income statement would you expect to change, and by what percentage would they change? Which figures would remain the same as in April?arrow_forwardWaterman's WaterWorld Tourist Park has collected the following data for operations for the year. Total revenues Total fixed costs Total variable costs Total tickets sold $ 2,300,000 $ 671,375 1,275,000 50,000 $ Required: a. What is the average selling price for a ticket? b. What is the average variable cost per ticket? a Average selling price b. Average variable cost c. Average contribution margin d. Break-even point e. Number of tickets c. What is the average contribution margin per ticket? Note: Do not round Intermediate calculations. d. What is the break-even point? Note: Do not round Intermediate calculations. e. Waterman's management has decided that unless the operation can earn at least $164,000 in operating profits, they will close it down. What number of tickets must be sold for Waterman's to make a $164,000 operating profit for the year on ticket sales? Note: Do not round Intermediate calculations. per ticket per ticket per ticket tickets ticketsarrow_forward
- Financial & Managerial AccountingAccountingISBN:9781337119207Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,