21 suppose a holiday inn hotel has annual fixed costs applicable to its rooms of 1 2 4309295

21) Suppose a Holiday Inn Hotel has annual fixed costs applicable to its rooms of $1.2 million for its 300-room hotel.  Average daily room rents are $50 per room and average variable costs are $10 for each room rented.  It operates 365 days per year.  What percent of occupancy is needed to breakeven?

A) 3.65%

B) 25%

C) 27.4%

D) 34.3%

22) Deadwood Hospital has variable costs of 50% of total revenues and fixed costs of $40 million per year.  There are 40,000 patient-days estimated for the next year.  The break-even point expressed in total revenue is ________.

A) $10 million

B) $40 million

C) $80 million

D) $90 million

23) Medina Hospital has variable costs of 75% of total revenues and fixed costs of $40 million per year.  There are 40,000 patient-days estimated for next year.  What is the average daily revenue per patient necessary to breakeven?

A) $250

B) $1,000

C) $4,000

D) $20,000

24) The sales price is $30 per unit, the contribution margin is $8 per unit and total fixed costs are $32,000.  What is the break-even point in units?

A) 857

B) 1,200

C) 2,000

D) 4,000

25) If the total amount of fixed costs increases, what is the effect on the break-even point?  (Assume no other changes.)

A) The break-even point increases.

B) The break-even point decreases.

C) The break-even point remains the same.

D) The break-even point will be zero.

26) If the variable cost per unit increases, what is the effect on the break-even point?  (Assume no other changes.)

A) The break-even point increases.

B) The break-even point decreases.

C) The break-even point remains the same.

D) The break-even point is zero.

27) If the selling price per unit increases, what is the effect on the break-even point?  (Assume no other changes.)

A) The break-even point increases.

B) The break-even point decreases.

C) The break-even point remains the same.

D) The break-even point is zero.

28) The break-even point is the level of sales at which revenue equals fixed costs.

29) At the break-even point, net income may be positive.

30) The break-even point is when enough units are sold that total contribution margin equals total variable costs.