Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $36.00 $ 44.00 Variable cost per day 13.50 18.20 Biscayne's total fixed cost is $20,000 per month. Required: Determine Biscayne's new break-even point in each of the following independent scenarios: Product mix is 40/60. Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.) Fixed costs increase by $2,800. (Assume a product mix of 50/50.) Variable costs increase by 30 percent. (Assume a product mix of 50/50.)
Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Standard Deluxe Rental price per day $36.00 $ 44.00 Variable cost per day 13.50 18.20 Biscayne's total fixed cost is $20,000 per month. Required: Determine Biscayne's new break-even point in each of the following independent scenarios: Product mix is 40/60. Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.) Fixed costs increase by $2,800. (Assume a product mix of 50/50.) Variable costs increase by 30 percent. (Assume a product mix of 50/50.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am. 173.
Transcribed Image Text:Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information
follows:
Standard Deluxe
Rental price per day $36.00 $ 44.00
Variable cost per day 13.50 18.20
Biscayne's total fixed cost is $20,000 per month.
Required:
Determine Biscayne's new break-even point in each of the following independent scenarios:
Product mix is 40/60.
Sales price increases on both models by 20 percent. (Assume a product mix of 50/50.)
Fixed costs increase by $2,800. (Assume a product mix of 50/50.)
Variable costs increase by 30 percent. (Assume a product mix of 50/50.)
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