The Lake Shore Inn is trying to determine its break-even point. The inn has 50 rooms that it rents at $60 a night. Operatings costs are as follows:
Salaries $7,200 per month
Utilities 1,500 per month
Depreciation 1,200 per month
Maintenance 300 per month
Maid Service 8 per room
Other costs 28 per room
Determine the inn's break-even point in (1) number of rooms per month and (2) dollars
Template for Exercise 5-9
Directions: Calculate the following. Show your work.
Contribution margin per room
Contribution margin ratio
Break-even point in rooms
Break-even point in dollars
Contribution margin per room =Selling Price (rent per night) per room - variable cost per night per room
Selling Price per night per room = $60
Variable Cost per night per room = Maid Service +Other costs = ...
The expert computes the break-even point for The Lake Shore Inn.