# The bonita inn is trying to determine its break-even point.

E6-1 The Bonita Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at a night. Operating costs are as follows.

 Salaries \$8,800 per month Maintenance \$800 per month Utilities 2,400 per month Maid service 8 per room Depreciation 1,500 per month Other costs 37 per room

Instructions
(a)(1) Determine the inn’s break-even point in number of rented rooms per month.
(a)(2) Determine the inn’s break-even point in dollars.
(b)(1) If the inn plans on renting an average of           rooms per day           (assuming a -day month), what is the monthly margin of safety in dollars?
(b)(2) If the inn plans on renting an average of           rooms per day (assuming a 30-day month), what is the margin of safety ratio?

TUTORIAL PREVIEW
(a)(1) Determine the inn’s break-even point in number of rented rooms per month.

 Contribution margin per room = \$60 –     ( \$8 + \$37 ) Contribution margin per room = \$15