Question

You nun a hospital with 100 rooms. Fixed daily cost is $921.00 which includes staff salary, property charges, maintenance etc. Variable cost per room is $19.00 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $84.00 per room per day. You sold 35.00 rooms today, how much profit/oss did you earn for today.

Answer 1

The hospital earned a profit of $1354.00 for the day after subtracting both fixed and variable costs from the total revenue generated from 35 sold rooms.

Step-by-step explanation:

To calculate the profit or loss for your hospital for the day, we first need to consider both fixed and variable costs. The fixed daily cost is $921.00, which is a constant regardless of the number of rooms sold. Additionally, there is a variable cost of $19.00 per room that is applied only when a room is occupied. Since you sold 35 rooms today, your total variable cost will be 35 rooms times $19.00 per room, amounting to $665.00. You also charge $84.00 per room, so the total revenue from the 35 sold rooms is 35 rooms times $84.00, which equals $2940.00. To find out the profit or loss:

1. Calculate the total variable cost for the day: 35 rooms x $19.00 = $665.00
2. Calculate the total revenue for the day: 35 rooms x $84.00 = $2940.00
3. Subtract the sum of the fixed cost and the total variable cost from the total revenue: $2940.00 - ($921.00 + $665.00) = $1354.00

The result is a profit of $1354.00 for the day.