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

Question

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 month’s activity in the form of a cost-volume-profit income statement is shown below. 1. Calculate the break-even point in dollars. Calculate the break even point in number fares without calculations determins the contributio margin at the break even point

fare rev (1330 fares) 39900

variable costs fuel 5809

tolls 3573

maintence 992 10374

contribution margin 29526

fixed costs

salaries 12500

depreciation 1100

insurance 4530 18130

net income 11396

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount Sales          39,900.00 Less Variable Expenses Fuel            5,809.00 Tolls            3,573.00 Maintenance                992.00 Total Variable cost          10,374.00 Contribution Margin          29,526.00 Fixed cost Salaries          12,500.00 Depreciation            1,100.00 Insurance            4,530.00 Total Fixed costs          18,130.00 Net operating income          11,396.00 Contribution margin ratio =29526/39900 74.00% Break even point in dollars= 18130/74%          24,500.00 Fare = 39900/1330                  30.00 Break even point in number fares = 24500/30                816.67 Contribution margin at BEP = Fixed costs          18,130.00

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