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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A program was created to randomly choose customers at a shoe store to receive a discount....

Statistics
Q

1) Describe passive transport. 2) Define concentration gradient, electrical gradient, and electrochemical gradient. 3) What factors play...

Medical Sciences
Q

Draw the titration curve (pH versus mL of NaOH added) that would be obtained from the...

Chemistry
Q

Which of these early naturalists developed a system of classification of organisms that is still...

Biology
Q

Particle A of mass m 3 with another particle B at rest having mass m...

Physics
Q

v 20 3 Find the following limits a lim f x O U 3 2...

Calculus
Q

Given f x x 1 x 2 x 3 what are the zeros and end...

Algebra
Q

I need the closing entries for Ch 6 Part 1 continuing problem city of Monroe....

Accounting
Q

The current price of a stock is $77, the sigma is 0.20 and the continuously-compounded...

Accounting
Q

The long-term liability section of Northwest Corporation's balance sheet as of December 31, 2020, included...

Accounting
Q

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck....

Accounting
Q

Which of the following would be considered an overhead cost for an automobile manufacturer? ...

Accounting