Prorated share of the centers fixed equipment-leasing costs

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Reference no: EM131004507

The Truck Stop is a repair facility specializing in the maintenance and repair of diesel engines just outside of Carlisle, Pennsylvania--one of the largest trucking hubs in the U.S. The business manager of the Truck Stop has been asked by the owners to prepare a financial analysis of the potential of a 24-hour repair operation. Opening such a center would require remodeling the facility and the hiring of some additional staff. Estimated first year expenses for the Truck Stop's diesel service center are:

Support staff salary expense $ 15,000

Mechanic Salary expense 80,000

Supplies 4,000

Equipment 5,000

Remodeling 10,000

Electricity, heat, and taxes 8,000

Total expenses $122,000

Mechanic and staff salary expenses are estimated on an hourly basis, reflecting additional salary and overtime costs. Supplies and remodeling expenses are above and beyond those required for normal facility operations. Equipment costs represent a prorated share of the centers fixed equipment-leasing costs. Electricity costs of $2,000 reflect additional anticipated usage, whereas heat and taxes of $6,000 reflect an allocated share of fixed expenses.

Please Calculate breakeven revenue for the Truck Stop's proposed 24-hour diesel service center.

Reference no: EM131004507

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