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John Rhoades owner of Rhoades Inn, has requested your assistance in analyzing his fifty room rooms-only property. He provides you information as follows:
The average room sales price is $30. Monthly fixed costs equal $20,000His variable costs per room sold equal $10.
Problem 1: Determine the Rhoades Inn's breakeven point in revenue
Problem 2: If revenues equal $450,000 what is the Rhoades Inn's margin of safety in revenues and rooms sold?
Problem 3: If John desires his property to generate a pretax profit of $100,000, how many rooms must be sold?
Problem 4: What is the occupancy percentage for the Rhoades Inn when pretax profit earned is $100,000?
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