Hiroki Tsuji provides shuttle service between four hotels near a medical center and an international airport. Hiroki Tsuji uses two 10-passenger vans to off er 12 round trips per day. A recent month’s activity in the form of a cost-volume-profi t income statement is shown below.

Instructions

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

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

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Fare revenues (1,500 fares) €36,000 Variable costs € 5,040 3,100 860 Fuel Tolls and parking Maintenance 9,000 Contribution margin 27,000 Fixed costs Salaries 15,700 1,300 1,000 Depreciation Insurance 18,000 € 9,000 Net income