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B. Calculate the expected costs when production is 5,000 units.
E5-9
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 $5,900 per month FIXED COST
Utilities $1,100 per month FIXED COST
Depreciation $1,000 per month FIXED COST
Maintenance $100 per month
FIXED COST
Maid service $14 per room VARIABLE
Other costs $28 per room VARIABLE
Instructions: Determine the inn's break-even point in
(a) number of rented rooms per month and
(b) dollars.
E5-13
Billings Company has the following information available for
September 2017.
Unit selling price of video game consoles
$ 400