If the 2000 cost is entirely fixed how much must each

Reference no: EM13576730

Dim Witt is the county commissioner of Clueless County. He decided to institute tolls for local ferry boat passengers. After the tolls had been in effect for four months, Astra Astute, county accountant, noticed that collecting $1,450 in tolls incurred a daily cost of$.2,000. The toll is $0.50 per passenger.

a.How many people are using the ferry boats each day?

b. If the $2,000 cost is entirely fixed, how much must each passenger be charged for the toll process to break even? How much must each passenger be charged for the toll process to make a profit of $250 per day?

c. Assume that only 80 percent of the $2,000 is fixed and the remainder varies by passenger. If the toll is raised to $0.60 per person, passenger volume is expected to fall by 10 percent. If the toll is raised and volume falls, will the county be better or worse off than it is currently and by what amount?

d. Assume that only 80 percent of the $2,000 is fixed and the remainder varies by passenger. If passenger volume will decline by 5 percent for every $0.20 increase from the current $0.50 rate, at what level of use and toll amount would the county first make a profit?

e. Discuss the saying "We may be showing a loss, but we can make it up in volume."

Reference no: EM13576730

Questions Cloud

Using a 12 discount rate compute the net present value of : jessica nekton received 150000 from her mothers estate. she placed the funds into the hands of a broker who purchased

Fun inc has a fully automated production facility in which : fun inc. has a fully automated production facility in which almost 97 percent of averhead costs are driven by machine

A particular test for the presence of steroids is to be : a particular test for the presence of steroids is to be used after a professional track meet. if steroids are present

Suppose a garage has 2 gates one with poisson distribution : suppose a garage has 2 gates one with poisson distribution of 3 carshour and the other gate 4 carshour. what is the

If the 2000 cost is entirely fixed how much must each : dim witt is the county commissioner of clueless county. he decided to institute tolls for local ferry boat passengers.

A sample of 100 customers of montana gas and electric : a sample of 100 customers of montana gas and electric resulted in the following frequency distribution of monthly

Flag financial uses straight-line depreciation for its : flag financial uses straight-line depreciation for its equipment with an estimated useful life of 10 years and zero

Refer to fireworks city during the year the company sold : information for 2013 and 2012 is presented below for this company which uses the straight-line depreciation method.

Consider a binomial experiment with n 10 and p 010 use : consider a binomial experiment with n 10 and p 0.10. use the binomial tables appendix b to answer parts a through

User Account

All Pages