Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Buck's The Next Step Advanced Medical Coding And Auditing

Authors: Elsevier

1st Edition

0323762778, 978-0323762779

More Books

Students also viewed these Accounting questions

Question

What is the purpose of a costbenefit analysis?

Answered: 1 week ago