The hotel has 85 rooms, an average daily rate of $88, and a per occupied room cost of $12. Its fixed costs are $102,000 per month. What is the required occupancy percent to realize a monthly profit of $15,000?

The hotel has 85 rooms, an average daily rate of $88, and a per occupied room cost of $12. Its fixed costs are $102,000 per month. What is the required occupancy percent to realize a monthly profit of $15,000?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A company has $50 per unit in variable costs and $1,200,000 per year in fixed costs. Demand is…

A: Price = Total cost + Mark up on cost

Q: A machine manufacturer sells each machine for $6,900. The fixed costs are $287,450 per annum,…

A: The break-even volume is the level of sales of a company in terms of the number of units sold, which…

Q: nt should be charged to obtain a maximum profit.

A: A real estate office handles a 40-unit apartment complex. When the rent is $540 per month, all units…

Q: The selling price of Product Y is set at $1,200 for each unit and sales for the coming year are…

A: Introduction:- Calculation of target profit as follows:- Target profit =Investment x 40%

Q: A company has following information:::- i) Number of rooms in the apartment = 100 ii) Rent per…

A: NOI is an important comparable figure and profitability metric used exclusively for income-producing…

Q: Your corporation sells a product for $10 per unit. The variable expenses are $6 per unit, and the…

A: Break-even analysis is a technique used widely by the production management. It helps to determine…

Q: What is the monthly break-even point of a restaurant that sells meals at R$60.00 per kilo, with the…

A: The break-even point is the sales volume at which there is no profit and no loss. It is computed as…

Q: A product sells for $50 with variable costs of $36 per unit and annual fixed costs of $1,200,000. If…

A: Contribution Margin :— It is the difference between sales revenue and variable cost. Number of…

Q: The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the…

A: Formula: Net profit = Revenues - Expenses

Q: The owner of a bicycle repair shop forecasts revenues of $228,000 a year. Variable costs will be…

A: Income Statement: A financial statement that shows the profitability of the business in the given…

Q: Product X sells for $35 per unit and has related variable costs of $25 per unit. The fixed costs of…

A: Number of units of product that must be sold to earn desired income = (Fixed cost + Desired…

Q: Your storage firm has been offered $95,400 in one year to store some goods for one year. Assume your…

A: Net present value will be calculated as difference between the present value of future cash inflows…

Q: total bill (excluding tax and tip) is $12 per customer. Assume that fixed costs increase to…

A: Let the number of meal be x. Bill amount 12.00X Less : Variable cost 9.60X Contribution 2.40X…

Q: A hotel has 300 rooms and an annual fixed cost of BRL 1,500,000.00 and variable costs of BRL 90.00…

A: Break Even Point: Break even sales is the dollar amount of revenue where there is no profit for the…

Q: A 100,000 SF office building has average rents of $30 per SF per year for a full-service gross…

A: An operating expense, also known as an operational expense, operational expenditure, or opex, is a…

Q: The overhead costs in an automated factory are expected to increase at an annual compound rate of…

A: First year cost, P = $100,000 Growth rate, g = 10% Discount rate, r = 8% Period, n = 7 yearsThe…

Q: Hello can you please walk me through how to do this the annual income is 113,300 It is wise to set…

A: Future value of the savings when the annual interest rate is 5% can be calculated in the excel as…

Q: Suppose that there is a customer expected to annually generate $1,500 of gross contribution. With…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Your storage firm has been offered $96,100 in one year to store some goods for one year. Assume your…

A: Cash flow in one year = $96,100Cost of capital (k) = 8.9% or 0.089Initial investment = $97,000We…

Q: A health insurance policy costs $275/month and pays $100,000 for a major illness. The probability…

A: The expected net profit is the difference between the amount received by the company and the amount…

Q: Metalfab Pump and Filter expects the cost of steel bodies for 6-inch valves to increase by $3.75…

A: Present worth is calculated as follows using excel. Given Quarter Period Values of cash flows…

Q: 1. A company is considering opening a new product line. The building being considered will have a…

A: Lets understand the basics. Break even point is a point at which no profit/no loss condition arise.…

Q: Tutor, Incorporated (TI) provides instructional services to its customers. TI charges $240 per…

A: INCOME STATEMENT Income Statement is one of the Important Financial Statement of the Company. Income…

Q: The costs and revenue projections for a new product are estimated. What is the estimated profit at a…

A: At breakeven point total revenue is equal to total costs. In other words at breakeven there is no…

Q: The TopCar Industries manufactures and sells car components. The current annual sales volume is…

A: Sales volume = 500000 units Selling price per unit = P 0.50 Annual expenses = P 80000

Q: Lions Co. has machinery that cost $150,000. It is to be leased for 15 years with rent received at…

A: Lease is defined as the agreement formed between two parties namely lessor and lessee, under which…

Q: Downhill Ski n' Board Resort, with 300 suites, has a rack rate of $240, and an actual room rate of…

A: Given Actual rate = $220 Rack rate = $240 Yield = 0.7950 (79.50/100)

Q: A hotel has 300 rooms and an annual fixed cost of BRL 1,500,000.00 and variable costs of BRL 90.00…

A: Breakeven Point = Total Fixed CostsContribution per unit Breakeven rooms to be sold = Total Fixed…

Q: An entrepreneur is considering opening a coffee shop in downtown Pasadena. The building that he is…

A: Introduction Cost-Volume-Profit analysis (CVP analysis) is a powerful tool for planning and decision…

Q: A 99 - room hotel's fixed cost is 1 million per year and the variable cost is 40% of revenue. If 75%…

A: Both fixed and variable costs must be taken into account in order to determine the hotel's breakeven…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Compute and report the 95% prediction interval for annual profit for a new restaurant in Kamloops with the following characteristics: 15,000 covers, $150k food cost, $85k overhead costs, and $100k labour cost.
A 90-room motel has an average room rate of $64 and average occupancy of 77%. Its fixed costs are $800,000 a year, and its variable costs total $500,000. The owner wants to increase operating income from current level to $250,000. She decides to do the following adjustments: increase price by $6 spend $30,000 more per year on marketing to compensate for the higher room rate To motivate the staff, the owner also set a $2,000 reward to the best employee Send guest fruits to each room, which costs $5 per room How many rooms does she need to sell per night?
A restaurant has 145 seats needs $60,000 to earn the annual interest payment to the bank. Its monthly fixed labor cost is $7,800 along with other annual fixed cost of $270,000. It has a guest check average of $22 and per guest average cost of $15.50. What revenue is needed to cover all costs? What average daily seat turnover will be needed, assuming the operation is closed 3 days a year?
A 100-room hotel has an ADR of $100, annual fixed cost of $1,000,000, variable cost per room sold of $10 and average occupancy of 70%. Find the required occupancy if initial equity investment in the hotel was $2,000,000 and owners require an annual rate of return of 15% and tax rate is equal to 35%. Assume 30 days in a month and 360 days in a year.
Blue corp shows monthly fixed costs of Php1,797 and per-unit cost of PhP9.28. It sells 411 units in a month. What is the minimumum price Blue Corp. must sell each unit for to break even?
ABC Corporation sells its product for $12 per unit. Next year, fixed expenses are expected to be $400,000 and variable expenses are expected to be $8 per unit. How many units must the company sell to generate a target profit (net operating income) of $80,000?
The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the annual revenue. If annual revenue is $300,000, determine the annual profit (loss).
Your storage firm has been offered $99,500 in one year to store some goods for one year. Assume your costs are $96,800, payable immediately, and the cost of capital is 8.9%. Should you take the contract? The NPV will be $ (Round to the nearest cent.)
Pauley Company provides home health care. Pauley charges $85/hour for professional care. Variable costs are $29/hour and fixed costs are $78,000. Next year, Pauley expects to charge out 12,000 hours of home health care. What is the break-even point in hours? (Round to the nearest whole hour.)
A 50-room hotel has an ADR of $140 per room, variable cost of $25 per room and monthly fixed costs of $100,000. The average occupancy rate is equal to 60%. What is total monthly revenue equal to at the break-even point?
Your storage firm has been offered $96,900 in one year to store some goods for one year. Assume your costs are $95,200, payable immediately, and the cost of capital is 8.1%. Should you take the contract? The NPV will be $ Should you take the contract? The contract (Round to the nearest cent.) be taken (Select from the drop-down menu.)
A CERTAIN PRODUCT SELLS FOR $55. IT HAS VARIABLE COSTS OF $33 PER UNIT AND FIXED COSTS OF $300,000 PER YEAR. HOW MANY THE PRODUCTS MUST COMPANY MANUFACTURE TO BREAK EVEN?