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Oriole provides shuttle service between four hotels near a medical center and an international airport. Oriole uses two 10-passenger vans to offer 12 round trips
Oriole provides shuttle service between four hotels near a medical center and an international airport. Oriole 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.
Sales (1,330 passengers) | $39,900 | |||
Variable costs | ||||
Fuel | $5,809 | |||
Tolls and parking | 7,164 | |||
Maintenance | 992 | 13,965 | ||
Contribution margin | 25,935 | |||
Fixed costs | ||||
Salaries | 12,500 | |||
Depreciation | 1,700 | |||
Insurance | 1,400 | 15,600 | ||
Net income | $10,335 |
(a) Calculate the break-even point in dollars.
(b) Calculate the break-even point in number of fares.
(c) Without calculations, determine the contribution margin at the break-even point.
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