At what room occupancy level would the hotel break even

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Reference no: EM131518970

Question: A 60-room hotel near Land's End in Cornwall incurs annual fixed costs of £360,000. The hotel is open for 365 nights in the year and charges an average room rate of £68. The variable costs associated with room occupancy are £8 per room night.

Required:

(a) At what room occupancy level would the hotel break even?

(b) At what level of sales would the hotel make a before-tax profit of £60,000?

Reference no: EM131518970

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