Karen 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.
| Fare revenues (1,740 fares) |
|
|
|
$45,240 |
| Variable costs |
|
|
|
|
| Fuel |
|
$5,420 |
|
|
| Tolls and parking |
|
3,470 |
|
|
| Maintenance |
|
640 |
|
9,530 |
| Contribution margin |
|
|
|
35,710 |
| Fixed costs |
|
|
|
|
| Salaries |
|
13,060 |
|
|
| Depreciation |
|
1,390 |
|
|
| Insurance |
|
1,140 |
|
15,590 |
| Net income |
|
|
|
$20,120 |
|
|
|
 |