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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) | $ 34,500 | |||
Variable costs | ||||
Fuel | $ 5,603 | |||
Tolls and parking | 3,446 | |||
Maintenance | 956 | 10,005 | ||
Contribution margin | 24,495 | |||
Fixed costs | ||||
Salaries | 13,100 | |||
Depreciation | 1,500 | |||
Insurance | 1,517 | 16,117 | ||
Net income | $ 8,378 |
A. Calculate the break-even point in dollars.
B. Calculate the break-even point in number of fares. (Round answer to 0 decimal places, e.g. 5,275.)
C. Without calculations, determine the contribution margin at the break-even point.
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