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What is the breakeven point in number of rooms rented

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Reference no: EM133043828

Question - Assume that RAS AMBA Hotel has annual fixed costs applicable to its operation of Birr 182,500 for its 60-rooms motel; daily room rent income of Birr 150; and variable costs of Birr 50 for each room rented. It operates 365 days a year.

Required -

1. Operating income on rooms will be generated, if the motel is fully occupied throughout an entire year? 

2. How much operating income on rooms will be generated if the motel is half full during a year?

3. What is the breakeven point in number of rooms rented assuming that the motel is fully occupied throughout the year?

Reference no: EM133043828

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