Lappin Community Transit (LCT) is a not-for-profit mostly volunteer organization that provides transportation to seniors. As a not-for- profit, it refers to an excess of revenues over costs as a "surplus" and an excess of costs over revenues as a "deficit." LCT prices a round-trip ticket to downtown at $2.90 per trip. The variable costs of a ride are $4.65. The fixed costs of LCT, primarily for its paid staff and van leases, are $88,000 annually. The town of Lappin provides LCT with a flat subsidy, partially funded by downtown merchants, of $148,600 annually plus a per-trip subsidy of $0.25. Required: a. What is the break-even point for LCT in terms of number of round-trip ticket sold? b. The director of LCT expects 23,600 riders this year and asks you if it will operate at a surplus or deficit. What is your answer?

Lappin Community Transit (LCT) is a not-for-profit mostly volunteer organization that provides transportation to seniors. As a not-for- profit, it refers to an excess of revenues over costs as a "surplus" and an excess of costs over revenues as a "deficit." LCT prices a round-trip ticket to downtown at $2.90 per trip. The variable costs of a ride are $4.65. The fixed costs of LCT, primarily for its paid staff and van leases, are $88,000 annually. The town of Lappin provides LCT with a flat subsidy, partially funded by downtown merchants, of $148,600 annually plus a per-trip subsidy of $0.25. Required: a. What is the break-even point for LCT in terms of number of round-trip ticket sold? b. The director of LCT expects 23,600 riders this year and asks you if it will operate at a surplus or deficit. What is your answer?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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