The Wildcat Retirement Center charges $6000/month for a senior citizen to reside in a studio apartment
with assisted living care. The facility has operating expenses of $700,000 per month. Staffing levels are
dependent on the number of residents. Every senior citizen who enters the community requires additional
food, personal care, and support staff time. The estimated cost for each person is $5000 per person per
month.
a) How many senior citizen residents does the facility need to have in order to reach the
breakeven point?
b) What is the company’s annual profit or loss if they maintain an average residency level of
360 senior citizens?
c) Based on class discussion, explain two ways to lower the breakeven point