E6-1 The Bonita Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at a night. Operating costs are as follows.
Salaries
$8,800
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per month
Maintenance
$800
per month
Utilities
2,400
per month
Maid service
8
per room
Depreciation
1,500
per month
Other costs
37
per room
Instructions(a)(1) Determine the inn’s break-even point in number of rented rooms per month.(a)(2) Determine the inn’s break-even point in dollars.(b)(1) If the inn plans on renting an average of rooms per day (assuming a -day month), what is the monthly margin of safety in dollars?(b)(2) If the inn plans on renting an average of rooms per day (assuming a 30-day month), what is the margin of safety ratio?
TUTORIAL PREVIEW(a)(1) Determine the inn’s break-even point in number of rented rooms per month.
Contribution margin per room =
$60
– (
$8
+
$37
)
Contribution margin per room =
$15
