The Crazy Horse Hotel has a capacity to stable 50 horses. The fee for stabling a horse

is $100 per month. Maintenance, depreciation, and other fixed operating costs total

$1,200 per month. Variable operating costs per horse are $12 per month for hay and

bedding and $8 per month for grain.

1. Determine the monthly operating break-even point (in horses stabled).
2. Compute the monthly operating profit if an average of 40 horses are stabled.