Break-Even Point: The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain. To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

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Answer 1

Question

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

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The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows. Salaries $10,850 per month Utilities 2,900 per month Depreciation 1,600 per month Maintenance 850 per month Maid service 8 per room Other costs 34 per room Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. 1. Break-even point in rooms 2. Break-even point $ If the inn plans on renting an average of 50 rooms per day (assuming a 30-day month), what is (1) the monthly margin of safety in dollars and (2) the margin of safety ratio? (Round ratio to 0 decimal places, e.g. 10.) 1. Margin of safety $ 2. Margin of safety ratio %

The Sandhill Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rent at $120 a night. Operating costs are as follows: Salaries $5400 per month Utilities $1300 per month Depreciation $1100 per month Maintenance $2520 per month Maid service $33 per room Other costs $63 per room a/ Determine the inn’s break-even point in number of rented rooms per month. b/Determine the inn’s break-even point in dollars.

The Carla Vista Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $40 a night. Operating costs are as follows: Salaries $5,000 per month Utilities $1,100 per month Depreciation $1,200 per month Maintenance $780 per month Maid service $7 per room Other costs $13 per room (A) Determine the inn’s break-even point in number of rented rooms per month. Break-even point enter the break-even point in number of rented rooms rooms (B) Determine the inn’s break-even point in dollars. Break-even point in $enter the break-even point in dollars

Answer 2

Question

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

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Answer 3

Question

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

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Answer 4

Question

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

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Answer 5

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

Answer 6

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

Answer 7

Chapter 6, Problem 6.1E

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month.

Answer 8

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

Answer 9

(2)

To determine

Break-Even Point:

The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

To Determine: The Inn S’s break-even point in (1) number of rented rooms per month and (b) break-even point in dollars.

Answer 10

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

Answer 11

(b)

(1)

To determine

Margin of Safety: The margin of safety is that amount by which the actual value of the sales differs from the break-even sales value. This amount indicates that amount after which the business will reach the sales will reach the break-even point.

To Determine: The monthly margin of safety in dollars, if the inn plans on renting an average of 50 rooms per day.

Answer 12

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

Answer 13

(2)

To determine

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 6 - What is meant by CVP analysis?Ch. 6 - Provide three examples of management decisions...Ch. 6 - Prob. 3Q Ch. 6 - Describe the features of a CVP income statement...Ch. 6 - The traditional income statement for Wheat Company...Ch. 6 - Prob. 6Q Ch. 6 - What is meant by the term sales mix? How does...Ch. 6 - Prob. 8Q Ch. 6 - Prob. 9Q Ch. 6 - Prob. 10Q

Solution Summary: The author explains that the break-even point is a point where total cost incurred are the same as the total revenue earned.

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

Want to see the full answer?

Chapter 6 Solutions

Solution Summary: The author explains that the break-even point is a point where total cost incurred are the same as the total revenue earned.

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio. To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.

Want to see the full answer?

Chapter 6 Solutions

Margin of Safety Ratio: The margin of safety depicted as the percentage of sales is called margin of safety ratio. The amount of margin of safety is divided by sales to determine this ratio.

To Determine: The margin of safety ratio, if the inn plans on renting an average of 50 rooms per day.