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# HTM 370 Practice Problem.doc

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School
University of Massachusetts Amherst
Department
Hospitality & Tourism Managmnt
Course
HT-MGT 370
Professor
Atul Sheel
Semester
Spring

Description
Managerial Accounting For The Hospitality Industry Chapter 7 Worksheet Sunshine Inn has Total Sales of \$1,000,000 and Total Variable Costs of \$375,000 What is their Contribution Margin Total Sales 1,000,000 - Total Variable Cost (375,000) = Contribution Margin 625,000 What is their Contribution Margin Ratio CMR = Contribution Margin / Total Sales CMR = 625,000 / 1,000,000 CMR = 0.625 or 62.50% If the Marketing Department wants an additional \$250,000 for a promotional campaign, what are the required “Additional Sales” to recoup the expenditure? Additional Sales = Expenditure / CMR Additional Sales = 250,000 / 0.625 Additional Sales = \$400,000 Sunshine Inn has the following data Rooms 100 Average Daily Rate \$50.00 Variable Cost Per Room Sold \$15.00 Fixed Cost \$75,000 How many rooms do they need to sell to break-even? Rooms Sold = Fixed Cost / ( Sales Price – Variable Cost Per Room) Rooms Sold = 75,000 / (50 – 15) Rooms Sold = 75,000 / 35 Rooms Sold = 2,143 What is their occupancy percentage at break-even, Month of June? Occupancy % = Rooms Sold / Rooms Available Occupancy % = 2,143 / (100 * 30
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