$1.$ a$)$ A newly opened bed$-$and$-$breakfast projects the following:

Monthly fixed costs $$8000$

Variable cost per occupied room per night $$40$

Revenue per occupied room per night $$165$

How many rooms would have to be occupied per month in order to break even?

$(4$ marks$)$

b$)$ A production process requires a fixed cost of $$50,000$ and the variable cost per unit is

$$25.$ The revenue per unit was projected to be $$45,$ but a recent marketing study shows

that because of an emerging competitor, the revenue will be about $12\%$ lower. How does

this affect the break$-$even point?

$(4$ marks$)$