Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 5, Problem 5.11E
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.
| Fare revenues (1,500 fares) | $36,000 | |
| Variable costs | ||
| Fuel | $ 5,040 | |
| Tolls and parking | 3,100 | |
| Maintenance | 860 | 9,000 |
| Contribution margin | 27,000 | |
| Fixed costs | ||
| Salaries | 15,700 | |
| Depreciation | 1,300 | |
| Insurance | 1,000 | 18,000 |
| Net income | $ 9.000 | |
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-even point.
E5-12 In 2016, Manhoff Company had a break-even point of $350,000 based on a selling price of $5 Der unit and fixed costs of $112.000. In 2017. the selling price and the variable
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ABC Service company provides shuttle service between four hotels near a Hospital and an intermational airport. ABC 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 (1,440 fares/units)
OMR 36,000
Variable costs
Fuel
OMR 5,040
Tolls and parking
3,100
Maintenance
860
9,000
Contribution margin
27,000
Fixed costs
Salaries
12,700
1,300
Depreciation
1,000
Insurance
15,000
OMR 12,000
Net income
What is the break-even point in OMR/ dollars?
ABC Service company provides shuttle service between four hotels near a Hospital and an international airport. ABC 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 (1,440 fares/units)
OMR 36,000
Variable costs
Fuel
OMR 5,040
Tolls and parking
3,100
Maintenance
860
9,000
Contribution margin
27,000
Fixed costs
Salaries
12,700
Depreciation
1,300
Insurance
1,000
15,000
Net income
OMR 12,000
What is the break-even point in number of fares/Units?
Oriole provides shuttle service between four hotels near a medical center and an international airport. Oriole 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.
Sales (1,330 passengers)
$39,900
Variable costs
Fuel
$5,809
Tolls and parking
7,164
Maintenance
992
13,965
Contribution margin
25,935
Fixed costs
Salaries
12,500
Depreciation
1,700
Insurance
1,400
15,600
Net income
$10,335
(A) Calculate the break-even point in dollars.
Break-even point
$Type your answer here
(B) Calculate the break-even point in number of passengers.
Break-even point
Type your answer here
passengers
(C) Without calculations, determine the contribution margin at the break-even point.
Contribution margin at the break-even point
$Type your answer here
Chapter 5 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 5 - (a) What is cost behavior analysis? (b) Why is...Ch. 5 - (a) Scott Winter asks your help in understanding...Ch. 5 - Contrast the effects of changes in the activity...Ch. 5 - J. P. Alexander claims that the relevant range...Ch. 5 - The relevant range is indispensable in cost...Ch. 5 - Prob. 6QCh. 5 - How should mixed costs be classified in CVP...Ch. 5 - At the high and low levels of activity during the...Ch. 5 - "Cost-volume-profit (CVP) analysis is based...Ch. 5 - Faye Dunn defines contribution margin as the...
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Define the term margin of safety. If Revere...Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Monthly production costs in Dilts Company for two...Ch. 5 - Prob. 5.2BECh. 5 - For Wesland Company, a mixed cost is 15,000 plus...Ch. 5 - Bruno Company accumulates the following data...Ch. 5 - Markowis Corp. has collected the following data...Ch. 5 - Determine the missing amounts.Ch. 5 - Russell Inc. had sales of 2,20O,0O0 for the first...Ch. 5 - Rice Company has a unit selling price of 520,...Ch. 5 - Presto Corp. had total variable costs of 180,000....Ch. 5 - For Flynn Company, variable costs are 70% of...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Amanda Company reports the following total costs...Ch. 5 - Westerville Company accumulates the following data...Ch. 5 - Prob. 5.3DICh. 5 - Snow Cap Company has a unit selling price of 250,...Ch. 5 - Presto Company makes radios that sell for 30 each....Ch. 5 - Bonita Company manufactures a single product....Ch. 5 - Shingle Enterprises is considering manufacturing a...Ch. 5 - The controller of Norton Industries has collected...Ch. 5 - Family Furniture Corporation incurred the...Ch. 5 - The controller of Hall industries has collected...Ch. 5 - PCB Corporation manufactures a single product....Ch. 5 - Marty Moser wants Moser Company to use CVP...Ch. 5 - All That Blooms provides environmentally friendly...Ch. 5 - The Palmer Acres Inn is trying to determine its...Ch. 5 - In the month of March, Style Salon services 560...Ch. 5 - Spencer Kars provides shuttle service between four...Ch. 5 - In 2016. Manhoff Company had a break-even point of...Ch. 5 - Billings Company has the following information...Ch. 5 - Naylor Company had 210,000 of net income in 2016...Ch. 5 - Yams Company reports the following operating...Ch. 5 - Glacial Company estimates that variable costs will...Ch. 5 - Felde Bucket Co., a manufacturer of rain barrels,...Ch. 5 - Vin Diesel owns the Fredonia Barber Shop. He...Ch. 5 - Jorge Company bottles and distributes B-Lite, a...Ch. 5 - Tanek Corp.'s sales slumped badly in 2017. For the...Ch. 5 - Mary Willis is the advertising manager for Bargain...Ch. 5 - Prob. 5.5APCh. 5 - Kaiser Industries carries no inventories. Its...Ch. 5 - Bill Johnson, sales manager, and Diane Buswell,...Ch. 5 - Creative Ideas Company has decided to introduce a...Ch. 5 - The condensed income statement for the Peri and...Ch. 5 - Prob. 5.3BYPCh. 5 - Prob. 5.4BYPCh. 5 - Your roommate asks for your help on the following...Ch. 5 - Prob. 5.6BYPCh. 5 - Cost-volume-profit analysis can also be used in...
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