Share
Explore BrainMass

ACC403: A Revised Income Statement and The Contribution Margin Approach

Identify any activity in Enterprise Rent-A-Car organization where you can apply breakeven analysis.

Define:

A unit of measurement for the activity

Revenue per unit for the activity

Variable costs for the activity

Fixed costs for the period in the activity

If you cannot identify specific actual amounts, make a reasonable estimate (and indicate the method or source of information for that estimate) and apply the tool as if the data were factual.

Required: the report should include;

The name and nature of the organization

The activity and time period you used

The inputs you used and the source for those inputs

Your results

Any implications from your results

In other words, you must do a break-even analysis using the numerical calculations.

Solution Preview

ACC403: A Revised Income Statement, The Contribution Margin Approach
Identify any activity in Enterprise Rent-A-Car organization where you can apply breakeven analysis.

Define:
A unit of measurement for the activity
Revenue per unit for the activity
Variable costs for the activity
Fixed costs for the period in the activity

If you cannot identify specific actual amounts, make a reasonable estimate (and indicate the method or source of information for that estimate) and apply the tool as if the data were factual.
Required: the report should include;

The name and nature of the organization
Rent-A-Car organization
I have taken Avis as an organization. As per its corporate website, "Avis Rent A Car System, LLC and its subsidiaries operate one of the world's leading ...

Solution Summary

This solution provides steps to compute the revised income statement and the contribution margin. For the break-even analysis, I am using a hypothetical scenario of Avis expansion in India in the year 2011. I have chosen India, as its one of the fastest growing economy in the world.

$2.19