Determine the Cost volume profit analysis After Keon mentions that he has a mechanic friend, Bill, who

Determine the Cost volume profit analysis
 

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After Keon mentions that he has a mechanic friend, Bill, who would be looking at the cars before any deal was finalized, Meena admits that one of the limos needs a $3,000 repair. She has been considering selling the vehicle as is and upgrading to an oversized luxury limousine. When Keon asked if she had an idea how high the as-is price may be, Meena hesitated and said she wasn't sure. Keon described the issue to Bill and he advised that a $30,000 price was a reasonable in the current market. Keon has searched around for oversized limos and he thinks the best approach would be to buy a used one for $70,000. Keon believes he can generate revenues 33% higher than a regular limo. However, the cleaning, maintenance, and operating costs of the larger limo would be 25% higher than the smaller vehicles are currently incurring. Keon wants a detailed cost-volume-profit analysis on the oversized limo, as he believes there is more opportunity with pricing and business strategy here compared to the regular limos. After Keon mentions that he has a mechanic friend, Bill, who would be looking at the cars before any deal was finalized, Meena admits that one of the limos needs a $3,000 repair. She has been considering selling the vehicle as is and upgrading to an oversized luxury limousine. When Keon asked if she had an idea how high the as-is price may be, Meena hesitated and said she wasn't sure. Keon described the issue to Bill and he advised that a $30,000 price was a reasonable in the current market. Keon has searched around for oversized limos and he thinks the best approach would be to buy a used one for $70,000. Keon believes he can generate revenues 33% higher than a regular limo. However, the cleaning, maintenance, and operating costs of the larger limo would be 25% higher than the smaller vehicles are currently incurring. Keon wants a detailed cost-volume-profit analysis on the oversized limo, as he believes there is more opportunity with pricing and business strategy here compared to the regular limos.

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Total Fixed Costs 70000 cost of the used limo Total Variable Costs 25000 costs associated with the m... View the full answer