Current Attempt in Progress

The Palmer Acres Inn is trying to determine its break$-$even point during its off$-$peak season. The inn has $50$ rooms that it rents at $$60$ a night. Operating costs are as follows:

Salaries

Property tax

Depreciation $($straight$-$line$)$

Maintenance

Maid service

Other costs

$$5,900$ permonth

$$1,100$ permonth

$$1,000$ permonth

$$100$ permonth

$$14$ per room

$$28$ per room

A variable cost is a cost that

varies in total in proportion to changes in the level of activity.

occurs at various times during the year.

may or may not be incurred, depending on management's discretion.

varies per unit at every level of activity.