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 Cancun Jamaica 6 4 $73/night Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) 6963TL 4 $10/ea 7 5 $15/ea 4 $25/ea 2 $93/ea 4 2 $68/ea 1 1 $400 (Cancun), $500 (Jamaica) Transportation to and from airport 1 1 $60 (Cancun), $66 (Jamaica) The Cancun trip sells for $2,100, and the Jamaica trip sells for $1,860, 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 $118 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 Cost Data Cancun Jamaica 6 4 $73/night Meals: Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) 6963TL 4 $10/ea 7 5 $15/ea 4 $25/ea 2 $93/ea 4 2 $68/ea 1 1 $400 (Cancun), $500 (Jamaica) Transportation to and from airport 1 1 $60 (Cancun), $66 (Jamaica) The Cancun trip sells for $2,100, and the Jamaica trip sells for $1,860, 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 $118 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Rahul

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
Cancun
Jamaica
6
4
Cost Data
Meals:
Breakfasts
Lunches
Dinners
Scuba diving trips
Water skiing trips
Airfare (round trip from Miami)
Transportation to and from airport
7
69634L
454221
1
1
1
$73/night
$10/ea
$15/ea
$25/ea
$93/ea
$68/ea
$400 (Cancun),
$500 (Jamaica)
$60 (Cancun),
$66 (Jamaica)
The Cancun trip sells for $2,100, and the Jamaica trip sells for $1,860, 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 $118 in order to remain
competitive in the market. Recalculate profit margins for both packages at these price levels.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education