The Lake Shore Inn is trying to determine its break even point. The inn has 50 rooms that it rents at $60 a night. Operating costs are as follows.
|
Salaries |
$7,200 per month |
|
Utilities |
$1,500 per month |
|
Depreciation |
$1,200 per month |
|
Maintenance |
$300 per month |
|
Maid service |
$8 per room |
|
Other costs |
$28 per room |
Instructions
Determine the inn’s break even point in (a) number of rented rooms per month and (b) dollars.