A. How many trips must Bristol sell every month to break even?B. Bristol's owner believes that 350 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in term of the number of airport trips? Bristol Car Service offers airport service in a mid-size city. Bristol charges $50 per trip to or from the airport. The varlable cost for a triptotals $42, for fuel, driver, and so on. The monthly fixed cost for Bristol Rainbow Tours is $2,720.Required:a. How many trips must Bristol sell every month to break even?b. Bristol's owner believes that 350 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in termsof the number of airport trips?a.Break-even pointtripsb. Margin of safetytrips

Break-even point: The break-even point refers to a point where the total cost is equal to the total…

Answered: to break even?

Business

Accounting

to break even?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A fleet manager must choose between two trucks to purchase for a company's fleet. The company uses…

A: Equivalent uniform annual cost (EUAC) is a financial metric used to compare different investment…

Q: Given the previous question, suppose that we now increase production by one automobile per hour. If…

A: Answer:Given,Cost of another new vehicle = $18,000So, total cost of production = $ 30,000 + $18,000…

Q: Which of the following is a question that might be answered by an MIS system? What are employment…

A: The correct answer for the above mentioned question is given in the following steps for your…

Q: 24. 8-24 A souvenir retailer has an opportunity to establish a new location inside a large airport.…

A: The objective of the question is to determine the best decision for the souvenir retailer based on…

Q: Disk City, Incorporated, is a retailer for digital video disks. The projected net income for the…

A: CVP analysis includes concept of break even point, break even point is the point of sale where there…

Q: a. Assume that the cost of goods sold is 60% and that the monthly discount rate is 1%. Looking at…

A: LTV is abbreviated for "Lifetime Value." Lifetime Value, in a business sense, is the overall value…

Q: find annual profit. That is, find annual profit for each of these combinations of charge per copy…

A: Fixed Costs are those costs which remain fixed irrespective of the level of activity. Variable Cost…

Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $200 for…

A: Step 1:Equivalent Monthly Cost=Initial Cost*(r/12)/(1-1/(1+r/12)^n)+Monthly charges Step 2:Carrier…

Q: Looking for relevant cost when leasing a vehicle at $330 a month, plus $2 per mile over 10.000 miles…

A: Relevant costs are expenses that change based on the decision being made or a specific scenario…

Q: Based on cost alone, which carrier should you choose?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: A new garbage truck can be purchased for $64,000. Its expected useful life is six years at which…

A: Answered only part (d) as per the instructions. Internal rate of return is the rate of return of the…

Q: A company wants to decrease their energy use by 16%. If their electric bill is currently $2,700 a…

A: The decrease rate of energy consumption and the current bill can be used to compute the estimated…

Q: Suppose you have an internship at a chemical factory. Your supervisor asks you to calculate the net…

A: NPV is the difference between the present value of cash inflows and the present value of outflows. A…

Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay $210…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: After a successful year for your beach shop, you are wondering whether to open one more store this…

A: As there are equal chances of rainy or sunny so the probability of each chance is 0.50

Q: "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer,"…

A: A make-or-buy decision seems to be a behaviour of employing cost-benefit analysis to make a…

Q: get Co. currently sells 800 widgets per week for a price of $7.00 each. Their market research…

A: Company need to increase revenue to do that prices should be increased but that will decrease…

Q: A manufacturer of calculators has a fixed cost of $24,000 per month. Suppose that the marginal cost…

A: Sale price = $115 Marginal cost = Variable cost per unit = $40 Total fixed costs = $24,000…

Q: Question 2: An item may be bought for a price of $12 a piece. Making it would require buying a…

A: Financial break even point when net present value is zero and there is no loss and profit situation…

Q: An entrepreneur is considering opening a coffee shop in downtown Pasadena. The building that he is…

A: Introduction Cost-Volume-Profit analysis (CVP analysis) is a powerful tool for planning and decision…

Q: ercise I Early Horizons Day Care Center nas fixed costs of $300 10 per child per day. If it charges…

A: The Break-even point is that level of production where the business makes no profit no loss. In…

Q: Joan believes most locations could generate $ 37,000 in monthly sales. Is franchising a good idea…

A: The objective of the question is to determine if franchising is a good idea for Joan based on the…

Q: You are considering the purchase of a Condo in downtown Toronto that you hope to operate as an…

A: The cost estimation seems to be an important aspect to consider when making a choice about investing…

Q: manager of an automobile dealership is considering a new bonus plan designed to increase sales…

A: Hypothesis testing is a technique that helps in the testing of the sample and drawing inferences for…

Q: You are trying to decide between two mobile phone carriers. Carrier A requires you to pay$185 for…

A: Step 1: Calculate the Equivalent Annual Annuity (EAA) for Carrier A's plan.The Equivalent Annual…

Q: Currently, your firm sells 700 units a month at a price of $80 a unit. You think you can increase…

A: The incremental cash flow=(Price per unit-Variable cost per unit)×Number of additional units

Q: Suppose a business owner is trying to decide whether to invest in a new piece of machinery. The…

A: Since you have asked a question with multiple parts, we will solve first 3 parts as per policy.…

Q: Suppose you are creating the spreadsheet below to track the gas rates. A B C 1 Type of Customer…

A: Monthly bill can be defined as that bill which the customer is required to pay on monthly basis to…

Question

A. How many trips must Bristol sell every month to break even?

B. Bristol's owner believes that 350 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in term of the number of airport trips?

Bristol Car Service offers airport service in a mid-size city. Bristol charges $50 per trip to or from the airport. The varlable cost for a trip
totals $42, for fuel, driver, and so on. The monthly fixed cost for Bristol Rainbow Tours is $2,720.
Required:
a. How many trips must Bristol sell every month to break even?
b. Bristol's owner believes that 350 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in terms
of the number of airport trips?
a.
Break-even point
trips
b. Margin of safety
trips

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

A maker of mechanical systems can reduce product recalls by 25% if it purchases new packaging equipment. The cost of the new equipment is expected to be $40,000 four years from now. How much could the company afford to spend now, instead of 4 years from now, if it uses a minimum attractive rate of return of 12% per year?
Answer full question
You are the manager of an apartment complex with 100 units. When you set the rent at $1600 per month, all apartments are rented. As you increase rent by $50 per month, on average, 2 fewer apartments are rented. Maintenance costs run $200 per month for each occupied unit. What is the rent that maximizes the total amount of profit? Answer:
1. Find a franchisee's breakeven sales in dollars. 2. Is franchising a good idea for Wong if franchisees want a minimum monthly operating income of $7,000 and Wong believes that most locations could generate $26,000 in monthly sales?
A fleet manager must choose between two trucks to purchase for a company's fleet. The company uses an interest rate of 6% and will keep either truck for 3 years. Truck A costs $29,000 and has a market value of $18,000 after 3 years. Truck B costs $33,000 and has a market value of $20,000 after 3 years. Determine the equivalent uniform annual cost (EUAC) for the truck the fleet manager should buy. Express your answer as a positive number is $ to the nearest $10.
Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chains
7. A car buyer figures they can afford 60 equal monthly payments of $424 per month, starting next month. Given that constraint, what is the most they can borrow for the car if the rate is 6.24% APR compounded monthly? Enter answer rounded to the nearest dollar. 8. An investment is being evaluated that is expected to provide monthly cash flows starting 1 month from today, and lasting forever. The first cash flow is expected to be $1,166 and the remaining are expected to grow at a rate of 2.4% APR compounded monthly. What is the present value of this cash flow stream if discounted at a rate of 8.88% compounded monthly? Enter answer rounded to the nearest dollar.