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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners. Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport Cancun 6 6 7 6 3 4 1 Jamaica 4 1 4 5 4 2 2 1 $300 (Cancun), $525 (Jamaica) $40 (Cancun), $38 (Jamaica) The Cancun trip sells for $1,860, and the Jamaica trip sells for $1,620, and both packages allow two bags to be checked for free. 1 Cost Data $61/night $10/ea $15/ea $25/ea Complete this question by entering your answers in the tabs below. $81/ea $56/ea Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $106 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.

Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners. Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport Cancun 6 6 7 6 3 4 1 Jamaica 4 1 4 5 4 2 2 1 $300 (Cancun), $525 (Jamaica) $40 (Cancun), $38 (Jamaica) The Cancun trip sells for $1,860, and the Jamaica trip sells for $1,620, and both packages allow two bags to be checked for free. 1 Cost Data $61/night $10/ea $15/ea $25/ea Complete this question by entering your answers in the tabs below. $81/ea $56/ea Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $106 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport Cancun Jamaica 4 6 6 7 6 3 4 1 454N N 1 2 2 1 $300 (Cancun), $525 (Jamaica) $40 (Cancun), $38 (Jamaica) The Cancun trip sells for $1,860, and the Jamaica trip sells for $1,620, and both packages allow two bags to be checked for free. 1 Cost Data $61/night $10/ea $15/ea $25/ea $81/ea $56/ea Complete this question by entering your answers in the tabs below. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $106 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
Transcribed Image Text:Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Package Specifications Oceanfront room; number of nights Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport Cancun Jamaica 4 6 6 7 6 3 4 1 454N N 1 2 2 1 $300 (Cancun), $525 (Jamaica) $40 (Cancun), $38 (Jamaica) The Cancun trip sells for $1,860, and the Jamaica trip sells for $1,620, and both packages allow two bags to be checked for free. 1 Cost Data $61/night $10/ea $15/ea $25/ea $81/ea $56/ea Complete this question by entering your answers in the tabs below. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price of each trip by $106 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
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