1. Suppose Intervale Railway’s total revenues are $4,000,000, its variable costs are $2,000,000, and its fixed costs are $800,000. Compute the breakeven point in dollars.
a. $4,000,000
b. $800,000
c. $1,600,000
d. $2,000,000
2. If Intervale Railway’s fixed costs total $90,000 per month, the variable cost per passenger is $45, and tickets sell for $75, how much revenue must the Railway generate to earn $120,000 in operating income per month?
a. $350,000
b. $210,000
c. $7,000
d. $525,000