Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a resort hotel has total annual sales revenue of $

A resort hotel has total annual sales revenue of $1,000,000, variable costs of $350,000, and...

90.2K

Verified Solution

Question

Accounting

A resort hotel has total annual sales revenue of $1,000,000, variable costs of $350,000, and fixed costs of $570,000. The fixed costs include $80,000 a year for land rental lease. The landowner offered an alternative variable rent based on 10% of the revenue. a. If the management accepts this proposal, what would be the new breakeven point? (Hint: Acceptance of the variable lease will reduce fixed costs by $80,000 and increase variable costs by 10%.) b. What is the indifference point? c. Explain whether management should accept this proposal if next yers total sales revenue is expected to be $1,200,000.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Medical Sciences
1.2K views

All of the following affect the blood clotting process EXCEPT: prothrombin blood platelets heparin erythropoietin fibrinogen

Biology
1.2K views

Which one of the following caryotype is NOT an EUPLOIDY OA 46 chromosomes OB 69...

Biology
1.2K views

Which of the following is are examples of impulsive force Hitting a tennis ball with...

Calculus
1.2K views

12 A race car is running practice laps in preparation for an upcoming race To...

Calculus
1.2K views

Use a graphing utility to find the point s of intersection of f x and...

Accounting
1.2K views

In 1573, Phillip II, the ruler of the Spanish Empire, appointed Juan de Ovando to...

Accounting
1.2K views

'N > M. Shift End 0 Alt Gr III cul ins...

Accounting
1.2K views

- Best Buy Co., Inc. Included in the Case is the Best Buy 2022 Annual...

Accounting
1.2K views

Frazier Manufacturing Company collected the following production data for the past month: units Units Produced...

Accounting
1.2K views

1. Analyze the effects of each of the 16 transactions within the basic accounting equation....

Accounting
1.2K views

Your help is more important for mee Are there steps you could take...

Finance
1.2K views

You are the financial manager for a company that produces cars. Currently you only produce...