Concord Kars provides shuttle service between four hotels near a medical center

Question

Concord Kars provides shuttle service between four hotels near a medical center and an international airport. Concord Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below Fare revenues (1,340 fares) Variable costs $40,200 $7,236 Fuel Tolls and parking Maintenance 3,618 1.206 12,060 Contribution margin Fixed costs 28,140 Salaries Depreciation Insurance 14,650 1,210 940 16,800 $11,340 Net income Calculate the break-even point in dollars Break-even point Calculate the break-even point in number of fares Break-even point fares Without calculations, determine the contribution margin at the break-even point Contribution margin at the break-even point

Explanation / Answer

Ttotal Contribution 28140 Total revenue 40200 Contribution margin per fare 21 (28140/1340 fares) Contribution margin ratio 70% (Contribution/ Revenue) Break even Point in $: Total fixed cost / Cm ratio 16800 / 70% = $ 24000 Break-even point in terms of fare: Total fixed cost / Cm per unit 16800 /21 = 800 fares Contribution margin at break even:   16800 (equal to fixed cost)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.