(a) The break-even point of the company.

Question

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Answer 1

Question

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

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Answer 2

Question

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

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Answer 3

Question

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

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Answer 4

Question

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

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Answer 5

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

Answer 6

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

Answer 7

Chapter 2, Problem 11P

To determine

(a)

The break-even point of the company.

Answer 8

Expert Solution

Answer to Problem 11P

300 residents in order to break-even.

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Given information:

Price charged by company = $6000/month

Operating expenses = $600,000 per month

Cost per person = $4000 per person per month

a).

Break-even point is the point at which total revenue earned by the company is just sufficient to cover its total cost of operation.

Calculation:

Total revenue = P × Number of senior residentsTotal cost = $600,000 + $4,000 × Number of senior residents

At break-even point,

Total revenue = Total CostP × Number of senior residents = $600,000 + $4,000 × Number of senior residents$6000 × Number of senior residents= $600,000 + $4,000 × Number of senior residents$2000×Number of senior residents= $600,000Number of senior residents = $600,000Number of senior residents = 300.

Conclusion:

The Company needs to have 300 senior residents in order to just break-even.

Answer 13

To determine

(b)

The annual profit or loss of the company.

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.

Conclusion:

Annual profits = $1,200,000.

Answer 14

To determine

(b)

The annual profit or loss of the company.

Answer 15

Expert Solution

Answer to Problem 11P

Annual profits = $1,200,000.

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Given information:

Price charged by company = $6000/monthOperating expenses = $600,000 per monthCost per person = $4000 per person per month.

Calculation:

Profit per month= Total revenue – Total Cost= ($6000× Number of residents) – ($600,000 + $4,000×Number of residents)=($6,000×350) – ($600,000 + $4,000×350)=$2,100,000 − $600,000 – 1,400,000=$100,000Therefore, annual profits = $100,000×12 = $1,200,000.