Question

A hotel has a rack rate of 250 and a yield of 85%. There are 200...

A hotel has a rack rate of 250 and a yield of 85%. There are 200 rooms in inventory and last year they ran 70% occupancy. Variable costs are 35 dollars per room night sold. Fixed costs for one year are 5 million dollars.

Prepare an income statement for one year in the contribution margin format.
Determine the contribution margin per unit (room night)
Calculate breakeven sales revenue
If the company expected to make 2 million in operating income, calculate the breakeven number of room nights for one year.

Above is all the information I was given.

 1 Given, Rack rate 250 Yield 85% Room 200 Occupancy Rate 70% VC 35 per room per night FC 50,00,000 Discounted Price 212.5 Income statement Amount Revenue 10858750 Less: Variable Cost 1788500 Contribution Margin 9070250 Less: Fixed Cost 50,00,000 Net Income 40,70,250 Contribution margin per unit: Contribution Margin = Sales - VC Contribution margin per unit: 177.5 Break Even Point sales revenue: Rooms required to Break even = Fixed Cost / Contribution per room Break Even in rooms = 28169.014 Break Even in dollars = 5985915.5 Rooms required to be sold for 2 million of operating income Rooms = Fixed Cost + Operating Income/ Contribution Per Room Rooms required to be sold: 39437 Rooms