Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $360.00 per trip to or from the airport. The variable cost for a tour totals $47.00, for fuel, driver, and so on. The monthly fixed cost for NCT IS $14,085. 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? Note: Round your answer to the nearest whole number. a. Break-even point b. Margin of safety tours tours
Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $360.00 per trip to or from the airport. The variable cost for a tour totals $47.00, for fuel, driver, and so on. The monthly fixed cost for NCT IS $14,085. 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? Note: Round your answer to the nearest whole number. a. Break-even point b. Margin of safety tours tours
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs.
NCT charges $360.00 per trip to or from the airport. The variable cost for a tour totals $47.00, for fuel, driver, and so on. The monthly
fixed cost for NCT is $14,085.
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?
Note: Round your answer to the nearest whole number.
a. Break-even point
b. Margin of safety
tours
tours
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