Question

Sue Locke operates a bed and breakfast hotel with 20 units in a resort area of...

Sue Locke operates a bed and breakfast hotel with 20 units in a resort area of northern Michigan. Fixed overhead is $160,000 per year. The rooms rent for an average of $70 per night (including a free breakfast which costs Sue $4 per rented room per night). Other costs per rental are laundry and cleaning at $10 per night.

Show your work in detail

A) Determine the number of room rentals per year so Sue can break even.

B) If the current rentals are 3000 per year, prepare a contribution income statement.

C) If Sue raises the rental to $75 per night, what is the breakeven point in units?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Brian Propp operates a bed & breakfast hotel in Banff, Alberta, Canada. His forecasts for next...
Brian Propp operates a bed & breakfast hotel in Banff, Alberta, Canada. His forecasts for next year follow:   Annual rental costs   $44,000 Maintenance staff monthly salaries   $11,000 Cleaning staff monthly salaries   $15,000 Security cost per room rental   $7 Cost of food per room rental   $8 Average room rental revenue   $130 Monthly average no. of room rentals                            350   REQUIRED:   Calculate the number of room rentals per year that Brian needs to break even.   Calculate the annual sales revenue required to...
Use below information for Questions 14 to 15: Company X produces dining chairs and tables. The...
Use below information for Questions 14 to 15: Company X produces dining chairs and tables. The following budget information is available: Item                                     Dining Chairs                     Tables                                  Total Cost Machine Setups                               250                        600                                        TL48,700             Inspections                                        250                        400                                       TL72,000                             Labor hours                                       2,700                     2,400 Q-14) Compute total machine setups and inspection costs assigned to Dining Chairs, using plantwide method if the allocation base is labor hours. Q-15) Compute total machine setups and inspection...
a. The Troy Co. has the following information available: Total fixed costs $400,000 Expected sales (units)...
a. The Troy Co. has the following information available: Total fixed costs $400,000 Expected sales (units) 100,000 Selling price per unit $10.00 Contribution margin per unit $7.50 Tax rate 30% What is the after-tax net income? Question 1 options: $350,000 $280,000 $420,000 $400,000 b. Suppose a hotel has annual fixed costs applicable to its rooms of $2,000,000 for its 300-room hotel. Average daily room rents are $50 per room and average variable costs are $10 for each room rented. It...
Ivanka Trump after moving to Pakisatan and has purchase PC hotel Karachi in November 2020 and...
Ivanka Trump after moving to Pakisatan and has purchase PC hotel Karachi in November 2020 and renamed it Ivayana. The hotel is a 5 star luxury hotel consisting of 100 single rooms 70 double rooms and 40 Suites. The average night stay in a single room costs Rs 8000. Double bed cost Rs 19000 and suite costs Rs 35000. On average 70 single rooms, 60 double rooms and 35 suites are occupied. Besides, there are 4 ball rooms. The ball...
Delaware Medical Center operates a general hospital. The medical center also rents space and beds to...
Delaware Medical Center operates a general hospital. The medical center also rents space and beds to separately owned entities rendering specialized services, such as Pediatrics and Psychiatric Care. Delaware charges each separate entity for common services, such as patients’ meals and laundry, and for administrative services, such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity. Delaware Medical Center charged the following costs to Pediatrics for the...
7.) Mongelli Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The...
7.) Mongelli Family Inn is a bed and breakfast establishment in a converted 100-year-old mansion. The Inn's guests appreciate its gourmet breakfasts and individually decorated rooms. The Inn's overhead budget for the most recent month appears below: Activity level 90 guests Variable overhead costs: Supplies $ 234 Laundry 315 Fixed overhead costs: Utilities 220 Salaries and wages 4,290 Depreciation 2,680 Total overhead cost $ 7,739 The Inn's variable overhead costs are driven by the number of guests. What would be...
Sunrise Hotels (B) January 2018. The GM has asked you to prepare a CVP analysis to...
Sunrise Hotels (B) January 2018. The GM has asked you to prepare a CVP analysis to aid in discussing next year’s financial expectations at the upcoming Area Managers’ Meeting. The meeting brings together 45 hotel managers and three district managers from the Southwest Region. From your managerial accounting class, you learned that break-even sales volume is computed using fixed costs and the unit contribution margin. Since you will be forecasting break-even for this year (2018), you need to make several...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT