Question: 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

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.

Instructions
(a) Calculate the break-even point in
(1) Dollars and
(2) Number of fares.
(b) Without calculations, determine the contribution margin at the break-evenpoint.

Fare revenues (1,440 fares) Variable costs 36,000 5,040 3,100 860 Fuel Tolls and parking Maintenance 9,000 27,000 Contribution margin Fixed costs Salaries Depreciation Insurance 12,700 1,300 1,000 15,000 $12,000 Net income

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