In qno .32)
C part
The unit contribution per theatre package is low and it requires a large no of sales to break even.
What does this mean?
And how can they say 2000 rooms needed in quarter 1 to break even ?
And how do we get the figure 9125/4?
Many thanks
Ask the Tutor ACCA PM
March/June 2018
6y ago#1Breakeven is the sales needed for a profit of zero.
Given that the contribution per package is low, it will been high sales to achieve zero profit.
Have you not watched my free lectures on CVP analysis?
Given that the breakeven point is 1,000 packages and that each package is a 2 night stay, then the number of room nights needed is 1,000 x 2 = 2,000.
The hotel has 25 bedroom and is open 365 days a year. Therefore the room nights available is 25 x 365 = 9,125 per year.
There are four quarters in a year and therefore the room nights available in Q1 are 9,125/4
Hi sir,
Thank your for your reply.
In the same question b part )
Under fixed costs what is /12*3 ??
6y ago#3I assume that you are referring to the fixed costs.
The question gives the costs per year. Divide by 12 to get the monthly cost, and multiply by 3 to get the quarterly (3 month) cost.
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