Outback Escapes generates a revenue of $7,500 per person on its five-day package tours to wildlife parks in Kenya. The variable costs per person are as follows: Airfare $1,600 Hotel accommodation $3,100 Meals $600 Ground transportation $300 Park tickets and other costs $700 Total $6,300. The annual fixed costs total $570,000. Based on the data, solve the following problems:
a. Calculate the number of package tours that must be sold to breakeven.
b. Calculate the revenue needed to earn a target operating income of $102,000.
c. If fixed costs increase by $19,000, what decrease in the variable cost per person must be achieved to maintain the breakeven point calculated in Problem a?
d. The general manager at Outback Escapes proposes to increase the price of the package tour to $8,200 to decrease the breakeven point. Using the information in the original problem, calculate the new breakeven point. What factors should the general manager consider before deciding to increase the price of the package tour?