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Determine the contribution margin at the break-even point

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Reference no: EM13503561

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 (1,400fares)


$35,000
Variable costs



Fuel
$6,300

Tolls and parking
3,150

Maintenance
1,050
10,500
Contribution margin


24,500
Fixed costs



Salaries
12,495

Depreciation
1,176

Insurance
1,029
14,700
Net income


$9,800

(a) Calculate the break-even point in (1) dollars and (2) number of fares.

(1) Break-even point $

(2) Break-even point fares

(b) Without calculations, determine the contribution margin at the break-even point.

Reference no: EM13503561

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