Biscayne’s Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $ 46.00 $ 54.00 Variable cost per day 18.50 23.20 Biscayne’s total fixed cost is $22,500.00 per month. Required: 1. Determine Biscayne’s new break-even point in each of the following independent scenarios: a. Product mix is 40/60. (Do not round your intermediate calculations. Round your answer to the nearest whole number.) b. Sales price increases on both models by 15 percent. (Assume a product mix of 50/50.) (Do not round your intermediatecalculations. Round your answer to the nearest whole number.) c. Fixed costs increase by $3,800. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.) d. Variable costs increase by 20 percent. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
Biscayne’s Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $ 46.00 $ 54.00 Variable cost per day 18.50 23.20 Biscayne’s total fixed cost is $22,500.00 per month. Required: 1. Determine Biscayne’s new break-even point in each of the following independent scenarios: a. Product mix is 40/60. (Do not round your intermediate calculations. Round your answer to the nearest whole number.) b. Sales price increases on both models by 15 percent. (Assume a product mix of 50/50.) (Do not round your intermediatecalculations. Round your answer to the nearest whole number.) c. Fixed costs increase by $3,800. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.) d. Variable costs increase by 20 percent. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2CE
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Question
Biscayne’s Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows:
| Standard | Deluxe | ||||
| Rental price per day | $ | 46.00 | $ | 54.00 | |
| Variable cost per day | 18.50 | 23.20 | |||
Biscayne’s total fixed cost is $22,500.00 per month.
Required:
1. Determine Biscayne’s new break-even point in each of the following independent scenarios:
a. Product mix is 40/60. (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
b. Sales price increases on both models by 15 percent. (Assume a product mix of 50/50.) (Do not round your intermediatecalculations. Round your answer to the nearest whole number.)
c. Fixed costs increase by $3,800. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
d. Variable costs increase by 20 percent. (Assume a product mix of 50/50.) (Do not round your intermediate calculations. Round your answer to the nearest whole number.)
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