1 ) Presented below are variable costing income statements for Diggs Company and Doggs Company. They are in the same industry, with the same net incomes, but different cost structures.

Diggs Co. Doggs Co.

Sales $206,000 $206,000

Variable costs 82,400 51,500

Contribution margin 123,600 154,500

Fixed costs 78,600 109,500

Net income $45,000 $45,000

(a1)

Compute the break-even point in dollars for each company. (Round answers to 0 decimal places, e.g. 1,250.)

Diggs Co. Doggs Co.

Break-even point $ ----------------- $ ---------------------------

2)The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60a night. Operating costs are as follows.

Salaries$8,300per monthUtilities3,000per monthDepreciation1,500per monthMaintenance700per monthMaid service8per roomOther costs34per room

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

1.Break-even point in rooms

2.Break-even point$

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.)

1.Margin of safety$

2.Margin of safety ratio %