Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe, Information follows: Standard $36.00...

  

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Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe, Information follows: Standard $36.00 13.50 Rental price per day Variable cost per day Biscayne's total fixed cost is $20,000 per month. Deluxe $ 44.00 10.20 Required: Determine Biscayne's new break-even point in each of the following independent scenarios: 1. Product mix is 40/60. 2. Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.) 3. Fixed costs increase by $2,800. (Assume a product mix of 50/50.) 4. Variable costs increase by 30 percent. (Assume a product mix of 50/50) Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe, Information follows: Standard $36.00 13.50 Rental price per day Variable cost per day Biscayne's total fixed cost is $20,000 per month. Deluxe $ 44.00 10.20 Required: Determine Biscayne's new break-even point in each of the following independent scenarios: 1. Product mix is 40/60. 2. Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.) 3. Fixed costs increase by $2,800. (Assume a product mix of 50/50.) 4. Variable costs increase by 30 percent. (Assume a product mix of 50/50)

Answer rating: 100% (QA)

To determine Biscaynes new breakeven point in each scenario we need to calculate the contribution margin per unit and then use it to calculate the bre... View the full answer