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August 29, 2014

August 29, 2014

Posted by **wacky chick** on Monday, February 6, 2012 at 5:57pm.

1 400 (280)

2 1200 360

3 1600 680

4 800 40

total 4000 800

Number of visitors for the year 50000.

Next year management anticipates an increase in unit variable cost of 10 percent and a profit target of 1 million.

1.calculate total fixed and total variable cost for the year. show annual results showing fixed and variable separately. show revenue and cost per visitor.

2.if there is no increase in visitors for the next year, what will be the required revenue rate per hotel visitor to meet the profit margin?

If the reuired revenue rate per vistor is not raised what will be required to meet the profit target?

Discuss the assumptions that are made in typical PV or break even analysis and whether they limit its usefulness.

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