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What is the monthly margin of safety in dollars

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Reference no: EM132638335

The Richibouctou Inn is trying to determine its break-even point. The inn has 70 rooms available that are rented at $40 a night. Operating costs are as follows:

Salaries                        $5,506 per month

Maintenance                 $400    per month

Utilities                         $2,010  per month

Housekeeping service        $4       per room

Depreciation                  $1,480  per month

Other costs                    $18        per room

Question 1: Determine the inn's break-even point in the number of rented rooms per month and dollars.

Question 2: If the inn plans on renting 29 rooms per day (assuming a 30-day month), what is the monthly margin of safety in dollars and the margin of safety ratio?

Reference no: EM132638335

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