A motel has 70 rooms it usually rents out, in the followingproportions: 45% singles at: $48.00 per night 35% doubles at:$62.00 per night 20% triples at: $72.00 per night The motel hasannual fixed costs of $365,000 and variable costs averages $12.00per room occupied.
a. Calculate the motel's breakeven level.
b. Calculate the revenue level that will provide operating income(before tax) of $65,000 a year.
c. Calculate the revenue levelnecessary to provide an operating income (before tax) of $65,000,if the room rate was decreased by 15 percent.
d. Calculate therevenue level necessary to provide an operating income (before tax)of $65,000, assuming the average room rate will increase by 10percent. Variable cost per unit sold will increase to $14.00, and$30,000 per year will be spent on advertising (a part of fixedcost).