Solution-What is the monthly margin of safety in dollars

What is the monthly margin of safety in dollars

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Reference no: EM133015042

Question - The Ricchiuto Inn is trying to determine its break-even point. The inn has 75 rooms available that are rented at $50 a night. Operating costs are as follows:

Salaries $10,000 per month

Maintenance $500 per month

Utilities 2,000 per month

Housekeeping service 5 per room

Depreciation 1,000 per month

Other costs 25 per room required

Required -

a. Determine the inn's break-even point in (1) the number of rented rooms per month and (2) dollars?

b. If the inn plans on renting 30 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?

Reference no: EM133015042

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What is the monthly margin of safety in dollars

Reference no: EM133015042

Reference no: EM133015042

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