Stop-n-Shop operates a downtown parking lot containing 800 parking spaces. The

Stop-n-Shop operates a downtown parking lot containing 800 parking spaces. The lot is open 2500 hours per year. The parking charge per car is
50 cents per hour; the average customer parks two hours. Stop-n-Shop rents the lot from a development company for $7250 per month. The lot
supervisor is paid $24000 per year. Five employees who handle the parking of cars are paid $300 per week for 50 weeks plus $600 each for the
two-week vacation period. Employees rotate vacations during the slow months when four employees can handle the reduced load of traffic. Lot
maintenance payroll taxes and other costs of operating the parking lot include fixed costs of $3000 per month and variable costs of 5 cents
per parking-space hour.

What is the contribution margin ratio? What is the annual break-even point in dollars of parking revenue?

Suppose that the five employees were taken off the hourly wage basis and paid 30 cents per car parked with the same vacation pay as before.

How would this change the contribution margin ratio and total fixed costs? (Hint: The variable costs per parking-space hour will now include 15
cents or one-half of the 30 cents paid to employees per car parked because the average customer parks for two hours.)

What annual revenue would be necessary to produce operating income of $300000 under these circumstances?