Spencer Kars provides shuttle service between four hotels near a medical center and an international airport. Spencer Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.
Fare revenues (1,500 fares) | $36,000 | |
Variable costs | ||
Fuel | $ 5,040 | |
Tolls and parking | 3,100 | |
Maintenance | 860 | 9,000 |
Contribution margin | 27,000 | |
Fixed costs | ||
Salaries | 15,700 | |
1,300 | ||
Insurance | 1,000 | 18,000 |
Net income | $ 9.000 |
Instructions
(a) Calculate the break-even point in (1) dollars and (2) number of fares.
(b) Without calculations, determine the contribution margin at the break-even point.
E5-12 In 2016, Manhoff Company had a break-even point of $350,000 based on a selling price of $5 Der unit and fixed costs of $112.000. In 2017. the selling price and the variable
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