Exercise 18-11

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 months activity in the form of a cost-volume-profit income statement is shown below.

Fare revenues (1,330 fares) Variable costs Fuel Tolls and parking Maintenance Contribution margin Fixed costs Salaries Depreciation Insurance Net income Calculate the break-even point in dollars. Break-even point 4,588 2,822 783 13,100 1,100 70 29,260 8,193 21,067 14,90 6,163