Question

Exercise 5-11 (Video) Pharoah provides shuttle service between four hotels near a medical center and an international airport. Pharoah 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. Sales (1,400 passengers) $36,400 Variable costs     Fuel $4,077     Tolls and parking 2,507     Maintenance 696 7,280 Contribution margin 29,120 Fixed costs     Salaries 11,000     Depreciation 1,300     Insurance 4,860 17,160 Net income $11,960

Your answer is incorrect. Try again. Calculate the break-even point in dollars. Break-even point $ LINK TO TEXT LINK TO TEXT

Your answer is incorrect. Try again. Calculate the break-even point in number of passengers. Break-even point passengers LINK TO TEXT LINK TO TEXT

Your answer is incorrect. Try again. Without calculations, determine the contribution margin at the break-even point. Contribution margin at the break-even point $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Requirement 1

Break-even point= $21,450

Requirement 2

Break-even point

825

passengers

Requirement 3

Contribution margin at the break-even point

$17,160

Working

A	Sales	$           36,400.00
B	Variable Expense	$             7,280.00
C=A-B	Contribution margin	$           29,120.00
D=C/A	CM ratio	80%
E	Fixed cost	$           17,160.00
F=E/D	Breakeven sales	$           21,450.00
G=36400/1400	Sales price per passenger	$                   26.00
H=F/G	Break-even point in units	825

I have used original data for calculating price per passenger.