Reference no: EM131703283

Question: (Setting prices for an Internal Service Fund) Yorktown uses an Internal Service Fund to account for its motor pool activities. Based on the following information, calculate the price per trip that the Internal Service Fund needs to charge users of the motor pool during calendar year 2013 in order to break even: Automobiles: The motor pool uses two sedans, each costing $25,000 and each estimated to have a 5-year life when they were acquired in 2012. Driver salaries: The motor pool has a driver-administrator, who earns $45,000 a year, and a driver, who earns $35,000. The city uses a rate of 30 percent (to cover pensions and other payroll fringe benefits) for planning purposes. Insurance: In 2012 the city purchased a 3-year automobile accident policy at a cost of $3,000. Fuel and maintenance costs: Based on experience, the driver-administrator estimates that total fuel and maintenance costs for the year will be $5,000. Billing units: To simplify record keeping, the fund charges a fixed price per trip. Yorktown's budget office estimates that 800 trips will be taken in 2013.