Unformatted text preview: ,000)90%
10,000 = 10.8 x -1800
Q = 1093 tickets 1 ACCT 2200 7.3 A text driver pays $200 per day for taxi rental, $2 per day for auto insurance and $5 per day for
business licenses. Gas and maintenance costs are $0.2 per mile. The taxi driver charges $0.6 per mile
and travels 30 miles per day without any customers.
a. How many miles must the driver carry customers to break even, without any tips?
b. How may miles must the driver carry customers to break even if customers give him average $50
tips per day?
FC $200+$2+$5 = $207 /day
FC $0.2 x 30 = $6/day
VC $ 0.2 /mile
a. 0 = 0.6x - 213 - 0.2x
213 = 0.4x
x = 532.5 miles
b. 0 = 50 + 0.6x - 213 - 0.2x
163 = 0.4x
x = 407.5 miles 4. CVP analysis of multiple products:
Step 1: Most firms have more than one product line, and CVP analysis may be adapted for these
firms. The same basic equations are used; however, the contribution margin must be weighted...
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