Spencer Kars provides shuttle service between four hotels near a medical center and an international airport. Spencer 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
(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) Variable costs $36,000 5,040 3,100 860 Fuel Tolls and parking Maintenance 9,000 Contribution margin Fixed costs 27,000 Salaries Depreciation Insurance 15,700 1,300 1,000 18,000 Net income $9,000