Question

You run a hospital with 100 rooms. Fixed daily cost is $935.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $10.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $77.00 per room per day. You sold 40.00 rooms today, how much profit/loss did you earn for today.

Answer 1

Answer: $1,745

Explanation:

Profit ( loss) = Sales -  Fixed costs - Variable costs

Sales = Rate per room * number of rooms rented

= 77 * 40

= $3,080

Variable costs = 40 * 10 per room

= $400

Profit (loss) = 3,080 - 935 - 400

= $1,745