Question

If a hotel sells room nights for $80 with a $20 variable cost per room and...

If a hotel sells room nights for $80 with a $20 variable cost per room and incurs $17,000 in fixed expenses monthly. What is the breakeven point in number of rooms sold?

a. 284.33

b. 213.50

c. 283.33

d. 212.50

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Answer #1
Correct Option C i.e. 283.33
Break Even Point = Fixed cost / Contribution per unit
      =17000/60
283.33
Contribution per unit = selling price - variable cost
   =80-20
                                                                           60
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