Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $60 per passenger. Excel Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $270,000 per month. The company's relevant range extends to 14,000 monthly passengers. a. What is the contribution margin per passenger? b. What is the contribution margin ratio? c. Use the unit contribution margin to project operating income if monthly sales total 11,000 passengers. d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $595,000.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
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Cruiseline offers nightly dinner cruises off the coast of Miami, San
Francisco, and Seattle. Dinner cruise tickets sell for $60 per
passenger. Excel Cruiseline's variable cost of providing the dinner is
$30 per passenger, and the fixed cost of operating the vessels
(depreciation, salaries, docking fees, and other expenses) is
$270,000 per month. The company's relevant range extends to
14,000 monthly passengers.
a. What is the contribution margin per passenger?
b. What is the contribution margin ratio?
c. Use the unit contribution margin to project operating income if
monthly sales total 11,000 passengers.
d. Use the contribution margin ratio to project operating income if
monthly sales revenue totals $595,000.
Transcribed Image Text:Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $60 per passenger. Excel Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $270,000 per month. The company's relevant range extends to 14,000 monthly passengers. a. What is the contribution margin per passenger? b. What is the contribution margin ratio? c. Use the unit contribution margin to project operating income if monthly sales total 11,000 passengers. d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $595,000.
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ISBN:
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