Question

You run a hospital with 100 rooms. Fixed daily cost is $2000 which includes staff salary, property charges, maintenance etc. Variable cost per room is $10 which includes cleaning, equipment rentals, utility cost etc. which is incurred only when the room is full. You charge $50 per room per day. You sold 30 rooms today, how much profit/loss did you earn.

Answer 1

lost $800

profit per room is 50-10= 40 per full room. 30 rooms at 40 each is $1200. fixed cost is $2000, $800 more than the days revenue