please explain the answer 2. Assume Intervale Railway is considering hiring a re
ID: 2569583 • Letter: P
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please explain the answer
2. Assume Intervale Railway is considering hiring a reservations agency to han dle senger reservations. The agency would charge a flat fee of $13,000 per mon $3 per passenger reservation. What is the total reservation cost if 200,000 take the trip next month? a. $613,000 Pas- plus b. $3.07 c. $600,000 d. $13,000 3. If Intervale Railway's fixed costs total $90,000 per month, the variable cost per pas- senger is $45, and tickets sell for $75, what is the contribution margin per unit and contribution margin ratio? a. $45 per passenger; 60% b. $3 c. $30 per passenger, 40% d, $45 per passenger, 40% 0 per passenger, 60% 4. If Intervale Railway's fixed costs total $90,000 per month, the variable cost per pas- senger is $45, and tickets sell for $75, what is the breakeven point in units? a. 1,200 passengers b. 2,000 passengers c. 225,000 passengers d. 3,000 passengersExplanation / Answer
2.Total reservartion costs=13000+(3*200,000)
=$613000
3.Contrinution margin=(Sales-Variable costs)
=(75-45)=$30/passenger
Contribution margin ratio=Contribution margin/Sales
=(30/75)=40%(B)
4.
Contribution margin=(75-45)=$30
Hence breakeven=Fixed costs/Contribution margin
=(90,000/30)=3000 passengers
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