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
Instructions
(a) Determine the inn's break-even point in
(1) Number of rented rooms per month
(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
(2) The margin of safety ratio?