Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent. Required: How many trips must Hammerhead sell to break even? How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent. Required: How many trips must Hammerhead sell to break even? How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent.
Required:
- How many trips must Hammerhead sell to break even?
- How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
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