Suppose Great Cruiseline decides to be a typ upper deck. Assume that fixed expenses are $114,000 per month and that the following ticket prices and variable expenses apply Executive Cruise Sale price per ticket Variable expense per passenger.... $ $ Regular Cruise 30 10 $ $ 135 75 Assume that Great Cruiseline expects to sell three regular cruises for every executive cruise. In this mix, the weighted-average contribution margin per cruise is $30. mail to break man
Suppose Great Cruiseline decides to be a typ upper deck. Assume that fixed expenses are $114,000 per month and that the following ticket prices and variable expenses apply Executive Cruise Sale price per ticket Variable expense per passenger.... $ $ Regular Cruise 30 10 $ $ 135 75 Assume that Great Cruiseline expects to sell three regular cruises for every executive cruise. In this mix, the weighted-average contribution margin per cruise is $30. mail to break man
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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accounting
Transcribed Image Text:Suppose Great Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course dinner on the t
upper deck. Assume that fixed expenses are $114,000 per month and that the following ticket prices and variable expenses apply
Executive Cruise
Regular Cruise
30
10
Sale price per ticket
Variable expense per passenger
$
$
CELE
$
$
Assume that Great Cruiseline expects to sell three regular cruises for every executive cruise. In this mix, the weighted-average contribution margin per cruise is $30.
a. Compute the total number of dinner cruises that Great Cruiseline must sell to break even
b.
Compute the number of regular cruises and executive cruises the company must sell to break even
Weighted avg. CM per unit
30
135
75
a. Compute the total number of dinner cruises that Great Cruiseline must sell to break even
First, enter the formula and then compute the total number of dinner cruises that Great Cruiseline must sell to break-even. (For amounts with a zero balance, make sure to enter "0" in the
appropriate cell. Abbreviations used: avg. CM-average contribution margin.)
Operating income
D
Fixed expenses
114000
(S
1$
b. Compute the number of regular cruises and executive cruises the company must sell to break even
Great Cruiseline must sell 2.280 regular cruises and 1.520 executive cruises to break even.
Break-even units
3,800
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