E5 fx =C5+D5 A B E F G H 1 The MCU Inn includes a 40-room lodging operation and coffee shop. 2 The average annual revenue and variable expense figures for the past two years have been as follows: 3 4 5 6 7 Revenue Rooms offee shop Total 600,000 400,000 120,000 200,000 320,000 Variable expenses 8 9 10 11 The fixed costs are as follows: Rooms department Coffee shop Overhead 50,000 60,000 300,000 12 13 14 15 1 The annual revenue at the breakeven point 2 Total net income when total revenue equals $1,200,000 (income tax = 20%) 3. The required level of annual revenue when net income is $200,000 (assume no income taxes) - 16 17 18 19 ANSWER 20 1 CMRw = 21 Total fixed costs = 22 Revenue at breakeven 23 (formula) (formula) (formula) 24 25 26 2 Revenue % (Rooms) Revenue % (Coffee shop) Total 60% 40% 100% 27 C56 fc 410000 A B D E 2 Revenue % (Rooms) Revenue % (Coffee shop) Total 60% 40% 100% Variable costs % (Rooms) Variable costs 2 (Coffee shop 20% 50% Total Revenue ####### Room Sales Coffee Shop Sales Total Revenue (formula) (formula) (formula) Variable Expenses Rooms (formula) Variable Expenses Coffee Sh (formula) Total Departmental Expenses (formula) 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 Total Contribution Margin (formula) Fixed costs: Rooms department Coffee shop Overhead Total Fixed costs (formula) (formula) (formula) (formula) Pre-tax earnings Taxes Net Income (formula) (formula) (formula) 3 Net income Fixed costs CMRW = Revenue required = 200,000 ####### (formula) (formula)