Reference no: EM132566953

Question - CarePlus provides recreational day trips for people with mental illnesses. Each client buys a $150 ticket for each trip; the variable costs average $60 per ticket. CarePlus has annual fixed costs of $702,000.

Required -

A. Compute the average number of tickets the company must conduct to break even.

B. Compute the average sales revenue needed to produce a target average profit of $36,000 per month.

C. Calculate the contribution margin per ticket.

D. Determine whether the following events will increase, decrease, or not affect the company's break-even point.

1. A decrease in ticket prices.

2. The termination of a salaried clerk (a replacement is planned).

3. A decrease in the average variable cost.

4. Instead of having its office building cleaned by a cleaning service, a business plans to hire its own cleaning crew.

5. An increase in rental expense.