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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Based on the description below, answer the questions that follow. The manager of a local restaurant spends $8,500 for its monthly fixed cost. Its variable cost is $9 per customer. Determine the amount of its Contribution Margin (CM) to generate the EBT of $6,500. (Do not put "$" or "," in your answer. Put only the number. For example put 10000 for $10,000. FYI, the Canvas will put "" automatically by itself. If necessary, round your answer to the nearest dollar.

2 Smart pizza delivers pizzas to the dormitories and apartments near a major university. The company's annual fixed expenses are 40,000. The sales price of a pizza is $10. and it costs the company$6 to make and deliver each pizza. Required: 1) Using the CM approach, compute the company's break-even point in units(pizza) 2) What is the contribution-margin ratio 3) Compute the break-even sales revenue. Use the contribution-margin ratio in your calculation 4) How many pizzas must the company sell to eam a target operating income of 80,000?

A privately-owned summer camp for youngsters has the following data for a 12-week session: Charge per camper: $480 per week Fixed costs: $192,000 per session Variable cost per camper: $320 per week Сарасity: 200 campers a) Develop the mathematical relationships for total cost and total revenue. b) What is the total number of campers that will allow the camp to just breakeven? c) What if the profit or loss for the 12-week session if the camp operates at 80% сараcity? d) What are the marginal and average costs per camper at 80% capacity? e) Would it be ethical to charge campers different rates depending on their family's socioeconomic status? Identify and describe two points pro and two points cons for such a policy. f) Draw cash flow diagram for this problem.

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.

Expert Solution & Answer

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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.

Expert Solution & Answer

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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.

Expert Solution & Answer

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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.