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Classy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger Classy 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) a $210,000 per month. The company's relevant range extends to 19,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. b. If volume increases by 9%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor Operating leverage factor

Classy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger Classy 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) a $210,000 per month. The company's relevant range extends to 19,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. b. If volume increases by 9%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor Operating leverage factor

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Classy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger Classy 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) a $210,000 per month. The company's relevant range extends to 19,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. b. If volume increases by 9%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor - Operating leverage factor
Transcribed Image Text:Classy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger Classy 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) a $210,000 per month. The company's relevant range extends to 19,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. b. If volume increases by 9%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Classy Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor - Operating leverage factor
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