1. The K&K Motel has 100 rooms and a swimming pool. Otheractivities such as vending machine sales and telephone sales areoperated on a breakeven basis and may be ignored.

1. Compute the net income expected during June (a summer month) if80% occupancy is achieved. (7 points)
2. Compute the breakeven point in the rooms sold during June. If80% occupancy is achieved each night, on what day does the K&Kbreak even? (2 points)
3. Compute the net income expected during November (a wintermonth) if 70% occupancy is achieved. (7 points)
4. Compute the breakeven point in the rooms sold during November.If 70% occupancy is achieved each night, on what day does theK&K break even? (2 points)

The K&K Motel has 100 rooms and aswimming pool. Other activities such as vending machine sales andtelephone sales are operated on a breakeven basis and may beignored.
					The cost structure of the K&Kdiffers slightly by month based on season. The variable costs peroccupied room are estimated as follows:
										Housekeeping	$     4.00
Operating supplies	$     2.00
Repair and maintenance	$     1.00
Utilities (summer)	$     0.50
Utilities (winter)	$     2.00
Pool/maintenance (summer)	$     0.50
Laundry	$     1.00
Fixed Costs per month are estimated asfollows:
Housekeeping - supervision	$   2,000
Front office	$   3,000
Administration	$   6,000
Depreciation	$   5,000
Pool costs (summer)	$   2,000
Utilities	$   1,000
Insurance and other	$   2,500
Assume the average income tax rate is30% of pretax income. The average daily rate of the K&K isestimated to be $35.00.