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 Cost Data Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport. Cancun Jamaica 6 4 $ 55/night 6 4 $ 10/ea 7 5 $ 15/ea 6 4 $ 25/ea 3 2 $ 75/ea 4 2 $ 50/ea 1 1 $ 375 (Cancun), $ 550 (Jamaica) 1 1 $ 25 (Cancun), $ 40 (Jamaica) The Cancun trip sells for $1,750, and the Jamaica trip sells for $1,500, and both packages allow two bags to be checked for free. 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 $100 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What are the current profit margins on both trips? (Round percentage answers to 1 decimal place (i.e. .123 = 12.3%).) Cancun Jamaica Profit margin Profit margin (%) % %

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 Cost Data Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) Transportation to and from airport. Cancun Jamaica 6 4 $ 55/night 6 4 $ 10/ea 7 5 $ 15/ea 6 4 $ 25/ea 3 2 $ 75/ea 4 2 $ 50/ea 1 1 $ 375 (Cancun), $ 550 (Jamaica) 1 1 $ 25 (Cancun), $ 40 (Jamaica) The Cancun trip sells for $1,750, and the Jamaica trip sells for $1,500, and both packages allow two bags to be checked for free. 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 $100 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What are the current profit margins on both trips? (Round percentage answers to 1 decimal place (i.e. .123 = 12.3%).) Cancun Jamaica Profit margin Profit margin (%) % %

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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eBook Question Content Area Analyze Atlantis Cruise Lines Atlantis Cruise Lines offers luxury, one-week cruise packages in the Greek Aegean Sea. The ship has a capacity for 1,200 people. Atlantis averages 1,000 passengers per cruise. The price per passenger is $6,000. Costs associated with a cruise are as follows: Line Item Description Amount Variable costs per cruise: Crew to serve passengers $1,200,000 Food 1,500,000 Amenity and excursion 400,000 Total variable cost per cruise $3,100,000 Fixed costs per cruise: Crew to run ship $1,500,000 Depreciation expense 120,000 Fuel 50,000 Total fixed cost per cruise $1,670,000 Atlantis proposes an early booking program to help increase the number of passengers per cruise. Under the proposed early booking program, the first 300 passengers to book a cruise will receive a $1,500 discount off the normal price for the cruise. Atlantis expects this program to increase the…
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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 Required 1 Required 2 Profit margin Profit margin (%) Required 1 $200 (Cancun), $405 (Jamaica) $29 (Cancun), $44 (Jamaica) The Cancun trip sells for $1,800, and the Jamaica trip sells for $1,560, and both packages allow two bags to be checked for free. Cancun Profit margin Profit margin (%) Required 2 Complete this question by entering your answers in the tabs below. % Cancun 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 $103 in order to remain competitive in the market. Recalculate…