Determine the variable costs per person per night

Reference no: EM132756182

Question: 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 $41,000 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.

1- Determine the variable costs per person per night and the total annually fixed costs.

2- (a) Determine the break-even point in (a) number of rentals and

(b) in dollars using the contribution margin technique.

Reference no: EM132756182

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