need 3-5 value: 10.00 points Biscayne\'s Rent-A-Ride rents two models of automob
ID: 2554988 • Letter: N
Question
need 3-5
value: 10.00 points Biscayne's Rent-A-Ride rents two models of automobiles: the standard and the deluxe. Information follows: Rental price per day Variable cost per day Standard Deluxe $30.00 $38.00 10.50 15.20 Biscayne's total fixed cost is $18,500 per month Required: 1. Determine the contribution margin per rental day and contribution margin ratio for each model that Biscayne's offers. (Round your "Unit Contribution Margin" answers to 2 decimal places.) Standard Deluxe Unit Contribution Margin Contribution Margin Ratio 9.50 per Day 22.80 per Day 0:9% 2. Which model would Biscavne's prefer to rent?Explanation / Answer
3)Breakeven point= Total Fixed expenses/(Wt average selling prices-Weighted avg variable exp)
Wt average selling price=(0.5*30)+(0.5*38)=34
Wt average variable price=(0.5*10.5)+(0.5*15.2)=12.85
Fixed costs=18500
Breakeveen point=18500/(34-12.85)=874.70
4)Breakeven point= Total Fixed expenses/(Wt average selling prices-Weighted avg variable exp)
Wt average selling price=(0.75*30)+(0.25*38)=32
Wt average variable price=(0.75*10.5)+(0.25*15.2)=11.675
Fixed costs=18500
Breakeveen point=18500/(32-11.675)=910.21
5)Breakeven point= Total Fixed expenses/(Wt average selling prices-Weighted avg variable exp)
Wt average selling price=(0.25*30)+(0.75*38)=36
Wt average variable price=(0.25*10.5)+(0.75*15.2)=14.025
Fixed costs=18500
Breakeveen point=18500/(36-14.025)=841.87
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