Use This Information to Answer the Next Two Questions $\bullet$ Fixed Costs: $120,000 Per Annum

Use this information to answer the next two questions. The following data relates to the Excelsior Hotel that provides overnight accommodation but no other services:
$\bullet$ Fixed costs: $120,000 per annum.
$\bullet$ Variable cost per room night sold: $10.
$\bullet$ Average selling price per room: $110.
$\bullet$ Annual after tax target profit: $144,000.
$\bullet$ Excelsior's profit taxed at: 40%
-What is the Excelsior Hotel's monthly breakeven in terms of rooms sold?

A) 100
B) 1,200
C) 960
D) 80
E) None of the above

Correct Answer:

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