Parkway Travel Tours is organizing a five-day trip from Toronto to Branson, Missouri,a family town with all types of attractions and theatres. Although it is a small town(around 10,000 people), Branson attracts millions of visitors every year.Branson hosts more than 100 live shows in 52 state-of-the art theatres. For thisparticular five-day trip, it will cost the agency the following:Buss and driverTravel guideAdvertisingMeals per person/dayHotel rooms (night)Events/attractionsOther fixed costsMiscellaneous variable costsPrice per client$2,500/day$500/day$1,000 (brochure and newspapers)$5.00 (4 breakfasts)$20.00 (5 dinners)$60.00 (4 nights)$40.00 (per event for a total of 7 events)$1,000$100 (per person)$1,700QuestionsWith the above information, calculate the following:1. Total fixed costs2. Variable costs (per client)3. Contribution margin (per client)4. PV ratio5. The number of clients needed to break-even6.The number of clients needed if Parkway wants to generate a$5,000 profit3 Draw the break-even chart and calculate the break-even point, the cash break-even point, and the profitbreak-even point, and explain how they can be applied in different organizations.

As per the guidelines, I am required to answer only the first question Break even point is the level…

Answered: Parkway Travel Tours is organizing a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A major credit card company is launching a referral program, which gives an existing customer $50 for each new customer he or she refers to the company. The credit card company estimates that the average annual spending of a customer is $15,000, and the revenue for the credit card company would be 5% of the spending. The estimated marketing and operations costs for the referral program is $500,000 per year. a. Build a spreadsheet model for the credit card company to estimate the annual increase in profit gained from the referral program. If the referral program helps the credit card company acquire 25,000 new customers, what is the annual increase in profit gained from the referral program. Assume all new customers are acquired at the beginning of the year. Profit increase b. It is estimated that 10% of the customers acquired through the referral program would have become customers of the credit card company even without the referral program. How does this information change the…
Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: A suitable location in a large shopping mall can be rented for $4,300 per month. Remodeling and necessary equipment would cost $366,000. The equipment would have a 20-year life and a $18,300 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $460,000 per year. Ingredients would cost 20% of sales. Operating costs would include $86,000 per year for salaries, $5,100 per year for insurance, and $43,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 12.0% of sales. Required: 1. Prepare a contribution format income statement that shows the expected…
Consider the following hypothetical sales scenario. A large community college buys and takes delivery of 50 iMac computers from a local Apple store. The invoiced price is $2,800 per unit and includes hardware, software essential to the functionality of the hardware, third-party software including Microsoft Office for Mac and Adobe Creative Suite, and two years of tech service and support. Apple uses vendor-specific objective evidence to determine unit prices of $2,500 and $300 for hardware and the essential software, respectively. The third-party software typically retails for $500 (but Apple purchases it at a 50% discount) and equivalent service and support contracts are $100 per year. The customer (the community college) can opt to purchase subsequent essential software and OS upgrades. Indicate how Apple should record gross revenue for the transaction at the time the customer takes delivery of the computers. Your response should include specific dollar amounts.
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Candle Light Bus Lines Ltd. runs a series of bus routes between cities across Canada. A new route, between Kenora and Thunder Bay, has been planned for next year. The sales manager has come up with a series of possible passengers that would use the route in the upcoming year. She tells you that passengers could range between 20,000 and 40,000 per year and that each ticket would be $25 per trip. Because of the availability of buses to service the route, the estimated passengers would be in increments of 10,000. The controller of the company provides you with the following information: Costs per passenger per trip: Fuel $5 Driver $4 Selling $2 Admin $1 In addition, she informs you that Facility Overhead will be $100,000 and Selling and Admin Overhead will be $50,000, regardless of the number of trips made in the year. Instructions a) Prepare a flexible budget for the company based on the above information for 20,000, 30,000, and 40,000 passengers. b) Assume that there were actually…
Garner Strategy Institute (GSI) presents executive level training seminars nationally. Eastern University (EU) has approached GSI to present 40 one-week seminars during 2013. This activity level represents the maximum number of seminars that GSI is capable of presenting annually. GSI staff would present the week-long seminars in various cities throughout the United States and Canada. Terry Garner, GST's president, is evaluating three financial options for the revenues from Eastern: accept a flat fee for each seminar, receive a percentage of Eastern's profit before tax from the seminars, and form a joint venture to share costs and profits. Estimated costs for the 2013 seminar follow: Fixed costs for the year: Salaries and benefits Facilities Travel and hotel Other Total fixed costs: Variable costs per participant Supplies and materials Marketing Other site costs Garner Strategy Institute Eastern University $200,000 N/A 48,000 N/A 0 $210,000 70,000 N/A $318,000 $210,000 0 $47 0 18 35…
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