New York Tours (NYT) provides daily sightseeing tours that include transportation, admission to selected attractions, and lunch. Ticket prices are \($85\) each. During June 2017, NYT provided 3,000 tours.

NYT is subject to an income tax rate of 40 percent.

Required

a. Prepare a contribution income statement for June.
Determine NYT’s monthly break-even point in units.
Determine NYT’s margin of safety for June 2017.
Determine the unit sales required for a monthly after-tax profit of $15,000.
Prepare a cost-volume-profit graph. Label the horizontal axis in units with a maximum value of 4,000. Label the vertical in dollars with a maximum value of \($300,000\). Draw a vertical line on the graph for the current (3,000) unit level and label total variable costs, total fixed costs, and total before-tax profits at 3,000 units.

Transcribed Image Text:

Variable Costs per Customer Admission fees. Lunch... Overhead Selling and administrative Total Fixed Costs per Month $30 Operations..... 17 Selling and administration 10 8 $65 Total $25,000 15,000. $40,000