Use below information for Questions 7 to 10: Jane Botosan operates a bed and breakfast hotel...
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Use below information for Questions 7 to 10: Jane Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $60,000 per year. Jane employs a maintenance person at an annual salary of $41,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,500 per year. The rooms rent at $122 per person per night including breakfast. Laundry and cleaning services cost $10.5 per person per night and the food is $5.9 per person per night. Q-7) Determine the BEP in sales. Q-8) Determine TNI in sales for $50,000 NI. Q-9) Jane is considering changing the business strategy. She considers installing additional cleaning machines which will decrease laundry and cleaning service per person per night by $3. However, fixed depreciation cost will increase by $4,090. Determine BEP in sales if the changes are made. (Do NOT round the rental number to integer.) Q-10) Determine BEP in units at which Jane would be indifferent between the current and proposed business models. (Do NOT round the rental number to integer.) Use below information for Questions 7 to 10: Jane Botosan operates a bed and breakfast hotel in a resort area near Lake Michigan. Depreciation on the hotel is $60,000 per year. Jane employs a maintenance person at an annual salary of $41,000 and a cleaning person at an annual salary of $24,000. Real estate taxes are $10,500 per year. The rooms rent at $122 per person per night including breakfast. Laundry and cleaning services cost $10.5 per person per night and the food is $5.9 per person per night. Q-7) Determine the BEP in sales. Q-8) Determine TNI in sales for $50,000 NI. Q-9) Jane is considering changing the business strategy. She considers installing additional cleaning machines which will decrease laundry and cleaning service per person per night by $3. However, fixed depreciation cost will increase by $4,090. Determine BEP in sales if the changes are made. (Do NOT round the rental number to integer.) Q-10) Determine BEP in units at which Jane would be indifferent between the current and proposed business models. (Do NOT round the rental number to integer.)
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Answer rating: 100% (QA)
Janes Bed and Breakfast Calculations Fixed Costs Depreciation60000 Salaries41000 24000 65000 Real Estate Taxes10500 Total Fixed Costs60000 65000 10500 ... View the full answer
Related Book For
Concepts In Federal Taxation 2017
ISBN: 9781305965119
24th Edition
Authors: Kevin E. Murphy, Mark Higgins
Posted Date:
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