Through using the high-low method, Regency Hotels estimates the total costs of providing room service meals to amount to $5,950 per month, plus 30 percent of room service revenue.
Required:
(a)What is the contribution margin ratio of providing room service meals? (Omit the "%" sign in your response.)
Contribution margin ratio 70%
(b)What is the break-even point for room service operations in terms of total room service revenue?
(Omit the "tiny_mce_markerquot; sign in your response.)
Break-even point $
(c)What would you expect to be the total cost of providing room service in a month in which room service revenue amounts to $15,000? (Omit the "tiny_mce_markerquot; sign in your response.)
Total Cost $