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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

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 ( 1,500 fares) $ 36,000
Variable costs
Fuel $ 5,040
Tolls and parking 3,100
Maintenance 860 9,000
Contribution margin 27,000
Fixed costs
Salaries 15,700
Depreciation 1,300
Insurance 1,000 18,000
Net income $ 9,000

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