Question
Biscaynes Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $ 46.00 $ 54.00 Variable
Biscaynes Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows:
Standard | Deluxe | ||||
Rental price per day | $ | 46.00 | $ | 54.00 | |
Variable cost per day | 18.40 | 24.30 | |||
Biscaynes total fixed cost is $14,525 per month. Required: 1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscaynes offers. (Round your "Unit Contribution Margin" answers to 2 decimal places.) 2. Which model would Biscaynes prefer to rent?
Deluxe Model | |
Standard Model |
3. Calculate Biscaynes break-even point if the product mix is 50/50. (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. (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. (Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started