Determine the number of rentals and the sales revenue jane

Reference no: EM13567052

)Jane Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $60,000 per year. Jane employs a maintenance person at an annual salary of $32,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,000 per year. The rooms rent at an average price of $60 per person per night including breakfast. Other costs are laundry and cleaning service at a cost of $10 per person per night and the cost of food which is $5 per person per night.

Instructions

(a) Determine the number of rentals and the sales revenue Jane needs to break even using the contribution margin technique.

(b) Jane is considering upgrading the breakfast service to attract more business and increase prices. This will cost an additional $3 for food costs per person per night. Jane feels she can increase the room rate to $66 per person per night. Determine the number of rentals and the sales revenue Jane needs to break even if the changes are made.

Reference no: EM13567052

Questions Cloud

Kendall inc has 15 million of outstanding bonds with a : kendall inc has 15 million of outstanding bonds with a coupon rate of 10 percent. the yield to maturity on these bonds

Write a module case study applying the shell model once : write a module case study applying the shell model once again go to the ntsb web site. analyze and evaluate a ntsb

An investment project has the following characteristicsthe : an investment project has the following characteristicscost of equipment22820annual cash inflows5000internal rate of

Determine the number of rentals and the sales revenue jane : jane botosan operates a bed and breakfast hotel in a resort area near lake michigan. depreciation on the hotel is 60000

Write a module case study applying the shell model once : write a module case study applying the shell model once again go to the ntsb web site. analyze and evaluate a ntsb

Thornton company has an old factory machine that cost 50000 : thornton company has an old factory machine that cost 50000. the machine has accumulated depreciation of 28000.

The equipment originally cost 20 million of which 80 has : allen air lines is now in the terminal year of a project. the equipment originally cost 20 million of which 80 has been

Frha co purchases a machine for 11500 terms 210 n60 fob : farha co. purchases a machine for 11500 terms 210 n60 fob shipping point. the seller prepaid the 260 freight charges

User Account

All Pages