ACC 560 Week 4 Assignment
E5-11 Airport Connection provides shuttle service between four hotels near a medical center and an international airport. Airport Connection uses two 10 passenger vans to offer 12 round trips per day. A recent month's activity in the form of a cost-volume-profit income statement is shown below.
Fare revenues (1,440 fares) $36,000
Variable costs
Fuel $5,040
Tolls and Parking 3,100
Maintenance 500 8,640
Contribution margin 27,360
Fixed costs
Salaries 13,000
Depreciation 1,300
Insurance 1,128 15,428
Net income $11,932
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
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