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Determine the contribution margin at the break-even point

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Reference no: EM132940911

Question - Kare Kars provides shuttle service between four hotels near a medical center and an international airport. Kare 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 (1,440 fares) $36,000

Variable costs

Fuel $5,040

Tolls and parking $3,100

Maintenance $860 $9,000

Contribution margin $27,000

Fixed cost

Salaries $12,700

Depreciation $1,300

Insurance $1,000 $15,000

Net income $12,000

Required -

(a) Calculate the break-even point in

(1) Dollar's

2) Number of fares

(b) Determine the contribution margin at the break-even point.

Reference no: EM132940911

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