What is the annual number of miles required for a trucking c

What is the annual number of miles required for a trucking company to break even, assuming the company adds one truck and trailer?

Please provide formula and results.

Revenue per mile                                                  

$ 2.20

Variable expenses per mile

$ 1.39

Contribution margin

$ 0.81

Breakeven mileage

Expected annual mileage

Contribution margin

Incremental fixed costs

($50,000) (additional truck + trailer)

Gross annual revenue

Total annual breakeven mileage

Revenue per mile	$ 2.20
Variable expenses per mile	$ 1.39
Contribution margin	$ 0.81
Breakeven mileage
Expected annual mileage	156,000
Contribution margin	126,360
Incremental fixed costs	($50,000) (additional truck + trailer)
Gross annual revenue	$76,360
Total annual breakeven mileage	????

Solution

Trucking Company Break Even Point Particulars Revenue per mile                                                   2.20 Variable expenses per mile 1.39 Contribution margin 0.81 Breakeven mileage: Expected annual mileage 156000 Contribution margin 126360 Break Even Mileage: Incremental fixed costs 50000 Contribution margin 0.81 Total annual breakeven mileage 61,728 (Fixed Cost/Contribution Margin per Mile) (50000/0.81)