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Question(s) / Instruction(s):

Jill Hayes operates a bed and breakfast hotel in a resort area in the smoky mountains. depreciation in the hotel is $60,000 per year. Jill employs a maintenance person at an annual salary of $32,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,000 per year. the rooms rent at an average price of $60 per person per night including breakfast. Other costs are laundry and cleaning service at a cost of $8.00 per person per night and the cost of food which is $4.00 per person per night.

A.) Determine the variable cost per night and the total monthly fixed costs

B.) Compute the break-even point in units and dollars.

C.) Jill is considering upgrading the breakfast service to attract more business and increase prices. This will cost an additional $3.00 for food costs per person per night. Jill feels she can increase the room rate to $65 per person per night. DETERMINE THE NUMBER OF RENTALS AND THE SALES REVENUE JILL NEEDS TO BREAK EVEN IF THE CHANGES ARE MADE

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