Answer:
a) 300
b) $100,000
Explanation:
Data provided in the question:
Charges by Country Fields Retirement Community per senior citizen = $6000/ month
Operating expenses = $600,000 per month
Cost for each person = $4000 per person per month.
Now,
a) Let the break even number of senior citizen residents be 'x'
Now,
At break even
Total revenue = Total cost
Thus,
$6000x = $600,000 + $4,000x
or
$2000x = $600,000
or
x = 300
b) Total profit or loss = Total revenue - Total cost
for 350 senior citizens
Total profit or loss = ($6,000 × 350 ) - ($600,000 + $4,000 × 350)
= $2,100,000 - $2,000,000
= $100,000 [Positive value means profit]
