Bay Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $50 per passenger. Bay Cruiseline's variable cost of providing the dinner is $20 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The company's relevant range extends to 15,000 monthly passengers. 1. If Bay Cruise line sells 10,000 dinner cruises, compute the margin of safety in 1. Units: 2. Sales dollars: 3. As a percentage of sales: 2. Compute the operating leverage factor when Bay Cruise line sells 12,000 dinner cruises: 3. If volume increases by 10%, by what percentage will operating income increase?
Bay Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $50 per passenger. Bay Cruiseline's variable cost of providing the dinner is $20 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The company's relevant range extends to 15,000 monthly passengers. 1. If Bay Cruise line sells 10,000 dinner cruises, compute the margin of safety in 1. Units: 2. Sales dollars: 3. As a percentage of sales: 2. Compute the operating leverage factor when Bay Cruise line sells 12,000 dinner cruises: 3. If volume increases by 10%, by what percentage will operating income increase?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bay Cruiseline offers nightly dinner cruises off
the coast of Miami, San Francisco, and Seattle.
Dinner cruise tickets sell for $50 per passenger.
Bay Cruiseline's variable cost of providing the
dinner is $20 per passenger, and the fixed cost
of operating the vessels (depreciation, salaries,
docking fees, and other expenses) is $210,000
per month. The company's relevant range
extends to 15,000 monthly passengers.
1. If Bay Cruise line sells 10,000 dinner cruises,
compute the margin of safety in
1. Units:
2. Sales dollars:
3. As a percentage of sales:
2. Compute the operating leverage factor
when Bay Cruise line sells 12,000 dinner
cruises:
3. If volume increases by 10%, by what
percentage will operating income increase?
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