FirLuxury Cruiseline offers nightly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for$60 per passenger. Luxury Cruiseline's variable cost of providing the dinner is $15 per passenger, and the fixed costof operating the vessels (depreciation, salaries, docking fees, and other expenses) is $180,000 per month. Thecompany's relevant range extends to 20,000 monthly passengers. Use this information to compute the following:a. What is the contribution margin per passenger?b. b. What is the contribution margin ratio?c. Use the unit contribution margin to project operating income if monthly sales total 17,000 passengers.Fird. Use the contribution margin ratio to project operating income if monthly sales revenue totals $620,000.

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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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Question

Fir
Luxury Cruiseline offers nightly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for
$60 per passenger. Luxury Cruiseline's variable cost of providing the dinner is $15 per passenger, and the fixed cost
of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $180,000 per month. The
company's relevant range extends to 20,000 monthly passengers. Use this information to compute the following:
a. What is the contribution margin per passenger?
b. b. What is the contribution margin ratio?
c. Use the unit contribution margin to project operating income if monthly sales total 17,000 passengers.
Fir
d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $620,000.

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