Spencer Kars pravices chuttile sarvice between tour hota near a medical canter a
ID: 2575432 • Letter: S
Question
Spencer Kars pravices chuttile sarvice between tour hota near a medical canter and an Internationalairpat. Spancer Kars use tno 10-parsanger vans to atter 12 round trips per day. A recant months actvity In the tarm at a coat-valume-protit Income statemant is shown Fara revenuAG 1,380 tares) $41,400 atabie cost: Tals and parking ,992 11,302 29,808 Cent-ibution margin Salaies 12,800 400 14,976 Calculate the breck even pcint in dolar. Break-e.cn polnt Calculate the breck even pcint in number of fares (Round ansiwer to 0 deciai places, e.g. 5,275) without taltulations. determina th contribution marin at th brak-even naint. Contribution rno'yi" at the break-even puntExplanation / Answer
As per Given Data Total Per Unit (Cost / Units Sold) Sales $ 41,400 $ 30.00 Variable Costs $ 11,592 $ 8.40 Fuel Cost $ 6,492 $ 4.70 Tolls and Parking $ 3,992 $ 2.89 Maintenance $ 1,108 $ 0.80 Contribution Margin $ 29,808 $ 21.60 Fixed Costs $ 14,976 $ 10.85 Salaries $ 12,800 $ 9.28 Depreciation $ 1,400 $ 1.01 Insurance $ 776 $ 0.56 Net Income $ 14,832 $ 10.75 Service Price per Unit = $41,400 / 1,380 = 30 Units Services = 1,380 2 Break Even Point in Units = Fixed Cost / Contribution Margin per Unit Contribution Margin = $29,808 Contribution Margin per Unit = Contribution Margin / Unit Sold = $29,808 / 1,380 = $21.60 Break Even Point in Units = Fixed Cost / Contribution Margin per Unit = $14,976 / $21.60 = 693.33 Fares 1 Break Even Point Sales = Service Price * Break Even Point in Units = $30 * 693.33 = $20,800 Contribution Margin = Sales - Variable Cost Contribution Margin = Fixed Cost + Profit At Break Even Point Profit will be Zero = 0 3 So, Contribution Margin at Break even Point = Fixed Cost = $14,976
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