Question: Airport Connection provides shuttle service between four hotels near a medical center and an international airport. Airport Connection 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.
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Fare revenues (1,440 fares)
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$36,000
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Variable costs
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Fuel
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$5,040
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Tolls and Parking
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3,100
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Maintenance
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500
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8,640
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Contribution margin
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27,360
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Fixed costs
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|
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Salaries
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13,000
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Depreciation
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1,300
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Insurance
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1,128
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15,428
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Net income
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$11,932
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Break-even in dollars
Break-even in fares