Question

You run a hospital with 100 rooms. Fixed daily cost is $880.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $11.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $55.00 per room per day. You sold 41.00 rooms today, how much profit/loss did you earn for today?

Answer 1

Answer:

$924

Explanation:

The computation of the profit/loss is shown below:

= Sale - variable cost - fixed daily cost

where,

Sale = Selling price per room × Number of rooms sold

= $55 × 41 rooms

= $2,255

And, the variable cost would be

= Variable cost per room × Number of rooms sold

= $11 × 41 rooms

= $451

And, the fixed daily cost is $880

Now put these values to the above formula

So, the value would be equal to

= $2,255 - $451 - $880

= $924