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Compute what is the monthly margin of safety in dollars

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Reference no: EM132728413

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows.

Salaries$6,100 per month
Utilities2,100 per month
Depreciation1,500 per month
Maintenance800 per month
Maid service8 per room
Other costs34 per room

Problem 1: 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%.)

Reference no: EM132728413

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