Question
Biscaynes Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $ 70.00 $ 82.00 Variable
Biscaynes Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows:
Standard | Deluxe | |
---|---|---|
Rental price per day | $ 70.00 | $ 82.00 |
Variable cost per day | 19.60 | 24.60 |
Biscaynes total fixed cost is $33,294 per month.
Required:
1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscaynes offers. Note: Round your "Unit Contribution Margin" answers to 2 decimal places.
2. Which model would Biscaynes prefer to rent?
3. Calculate Biscaynes break-even point if the product mix is 50/50. Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
4. Calculate the break-even point if Biscaynes product mix changes so that the standard model is rented 75 percent of the time and the deluxe model is rented for only 25 percent. Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
5. Calculate the break-even point if Biscaynes product mix changes so that the standard model is rented 25 percent of the time and the deluxe model is rented for 75 percent. Note: Do not round intermediate calculations. Round your final answer to the nearest whole number.
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