Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard $ 40.00 14.40 De luxe $46.00 18.40 Rental price per day Variable cost per day Biscayne's total fixed cost is $13,120 per month. Required: 1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. 2. Which model would Biscayne's prefer to rent? 3. Calculate Biscayne's break-even point if the product mix is 50/50. 4. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 75 percent of the time and the deluxe model is rented for only 25 percent. 5. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 25 percent of the time and the deluxe model is rented for 75 percent. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Unit Contribution Margin Contribution Margin Ratio Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. Note: Round your "Unit Contribution Margin" answers to 2 decimal places. Standard per Day % Required 5 Required 1 Deluxe per Day % Required 2
Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard $ 40.00 14.40 De luxe $46.00 18.40 Rental price per day Variable cost per day Biscayne's total fixed cost is $13,120 per month. Required: 1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. 2. Which model would Biscayne's prefer to rent? 3. Calculate Biscayne's break-even point if the product mix is 50/50. 4. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 75 percent of the time and the deluxe model is rented for only 25 percent. 5. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 25 percent of the time and the deluxe model is rented for 75 percent. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Unit Contribution Margin Contribution Margin Ratio Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. Note: Round your "Unit Contribution Margin" answers to 2 decimal places. Standard per Day % Required 5 Required 1 Deluxe per Day % Required 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows:
De luxe
$ 46.00
18.40
Rental price per day
Variable cost per day
Biscayne's total fixed cost is $13,120 per month.
Required:
1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers.
2. Which model would Biscayne's prefer to rent?
3. Calculate Biscayne's break-even point if the product mix is 50/50.
4. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 75 percent of the time and
the deluxe model is rented for only 25 percent.
Standard
$ 40.00
14.40
5. Calculate the break-even point if Biscayne's product mix changes so that the standard model is rented 25 percent of the time and
the deluxe model is rented for 75 percent.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Unit Contribution Margin
Contribution Margin Ratio
Required 3 Required 4 Required 5
Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers.
Note: Round your "Unit Contribution Margin" answers to 2 decimal places.
Standard
per Day
%
< Required 1
Deluxe
per Day
%
Required 2 >
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