Reference no: EM132315774

Question

A hotel has 20,000 room nights available per annum, charges $60 per room per night, pays fixed costs of $120,000 per annum and variable costs of $19 for each night a room is occupied. If the price per room per night is increased by 15 per cent, the break-even number of occupied room nights will be?

Use the following information to answer the next two questions. Smicer Ltd bought a van for $40,000 on 1st January 2010, which has an estimated residual value of $5,000 at the end of its useful life, which is five years. The company uses straight line depreciation.

1 The accumulated depreciation as at 30th June 2010 will be:

A. $3,500.00

B. $7,000.00

C. $8,000.00

D. $40,000.00

E. None of the above.

2. The carrying amount as at 30th June 2011 will be:

A. $10,500

B. $14,000

C. $29,500

D. $0

E. None of the above

Use the following information to answer the next two questions.

Babel Ltd uses predetermined overhead rates based on labour hours. The monthly budgeted overhead is $400,000 and the budgeted labour hours were 50,000. During the month the company worked a total of 80,000 labour hours and actual overheads totalled $600,000.

3. The overhead at the end of the month would therefore be:

A. $40,000 over- applied

B. $40,000 under-applied

C. $60,000 under-applied

D. $20,000 over-applied

E. None of the above.

4. If the actual overheads for the month were $650,000 instead of $600,000, the overhead at the end of the month would now be:

A. $40,000 over- applied

B. $10,000 under-applied

C. $40,000 under-applied

D. $20,000 over-applied

E. None of the above.

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