SOAL CVP – 2 :

JOHN WYNE, the owner/operator of the “RAMA BEACH

INN”, is interested in determining the level of sales necessary to
realize a net income of $ 600,000 next year. He has compiled
records on each department’s sales and costs, and assume that
the sales mix will be the same next year. The major department
the room department had sales of $ 2,500,000, and its
contribution margin was $ 1,750,000. The coffee shop had sales
of $ 750,000 and variable costs of 300,000. The restaurant had
sales of $ 1,250,000 and variable costs of $ 750,000. Mr. John
Wyne assumes that the fixed costs will be $ 1,200,000.

REQUIRED :

1. What is the CMRw, and BEP of the hotel ?

2. What is the required level of total sales to generate
$ 600,000 net income ?
( Assume that there are no income taxes ).
3. What is the required level of total sales to generate
$ 720,000 net income, if the income tax rate is 40% ?