Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $350.00 per trip to or from the airport. The variable cost for a tour totals $42.00 for fuel, driver, and so on. The monthly fixed cost for NCT is $13,860. Required: a. How many tours must NCT sell every month to break even? b. NCT's owners believe that 50 tours is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of tours?
Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $350.00 per trip to or from the airport. The variable cost for a tour totals $42.00 for fuel, driver, and so on. The monthly fixed cost for NCT is $13,860. Required: a. How many tours must NCT sell every month to break even? b. NCT's owners believe that 50 tours is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of tours?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $350.00 per trip to or from the airport. The variable cost for a tour totals $42.00 for fuel, driver, and so on. The monthly fixed cost for NCT is $13,860.
Required:
a. How many tours must NCT sell every month to break even?
b. NCT's owners believe that 50 tours is a reasonable
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