Question
Wildhorse provides shuttle service between four hotels near a medical center and an international airport. Wildhorse uses two 10-passenger vans to offer 12 round trips
Wildhorse provides shuttle service between four hotels near a medical center and an international airport. Wildhorse 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 (1,340 passengers) $30,820 Variable costs Fuel $3,624 Tolls and parking 1,921 Maintenance 619 6,164 Contribution margin 24,656 Fixed costs Salaries 13,300 Depreciation 1,900 Insurance 900 16,100 Net income $8,556
a1.Calculate the break-even point in number of passengers.
a2.Without calculations, determine the contribution margin at the break-even point.
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