Bristol Car Service offers airport service in a mid-size city. Bristol charges $38 per trip to or from the airport. The variable cost for a trip totals $36, for fuel, driver, and so on. The monthly fixed cost for Bristol Rainbow Tours is $620. Required: a. How many trips must Bristol sell every month to break even? b. Bristol's owner believes that 325 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of airport trips? trips Break-even point b. Margin of safety trips Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics. Sales price Variable costs Fixed costs $ 76 per smoker 38 per smoker 281,200 per month Hunter & Sons is subject to an income tax rate of 40 percent. Required: a. How many smokers must Hunter & Sons sell every month to break even? b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $63,840 after taxes? a. Break-even sales in units b. Number of units to be sold Rio Coffee Shoppe sells two coffee drinks-a regular coffee and a latte. The two drinks have the following prices and cost characteristics: Sales price (per cup) Variable costs (per cup) Regular Coffee Latte $ 1.70 $ 2.80 0.70 1.20 The monthly fixed costs at Rio are $7,616. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes. Required: How many cups of regular coffee and lattes must Rio sell every month to break even? Break-even Sales in Units Regular coffee Lattes Bristol Car Service offers airport service in a mid-size city. Bristol charges $38 per trip to or from the airport. The variable cost for a trip totals $36, for fuel, driver, and so on. The monthly fixed cost for Bristol Rainbow Tours is $620. Required: a. How many trips must Bristol sell every month to break even? b. Bristol's owner believes that 325 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of airport trips? trips Break-even point b. Margin of safety trips Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics. Sales price Variable costs Fixed costs $ 76 per smoker 38 per smoker 281,200 per month Hunter & Sons is subject to an income tax rate of 40 percent. Required: a. How many smokers must Hunter & Sons sell every month to break even? b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $63,840 after taxes? a. Break-even sales in units b. Number of units to be sold Rio Coffee Shoppe sells two coffee drinks-a regular coffee and a latte. The two drinks have the following prices and cost characteristics: Sales price (per cup) Variable costs (per cup) Regular Coffee Latte $ 1.70 $ 2.80 0.70 1.20 The monthly fixed costs at Rio are $7,616. Based on experience, the manager at Rio knows that the store sells 80 percent regular coffee and 20 percent lattes. Required: How many cups of regular coffee and lattes must Rio sell every month to break even? Break-even Sales in Units Regular coffee Lattes
