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  3. 3. bristol car service offers airport service in a

3. Bristol Car Service offers airport service in a mid-size city. Bristol charges $34 per...

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Accounting

3. Bristol Car Service offers airport service in a mid-size city. Bristol charges $34 per trip to or from the airport. The variable cost for a trip totals $20, for fuel, driver, and so on. The monthly fixed cost for Bristol Rainbow Tours is $3,220.

Required:

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

b. Bristol's owner believes that 240 trips is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of airport trips?

4. Hunter & Sons sells a single model of meat smoker for use in the home. The smokers have the following price and cost characteristics:

Sales price $ 75 per smoker
Variable costs 39 per smoker
Fixed costs 288,000 per month

Hunter & Sons is subject to an income tax rate of 40 percent.

Required:

a. How many smokers must Hunter & Sons sell every month to break even?

b. How many smokers must Hunter & Sons sell to earn a monthly operating profit of $45,360 after taxes?

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