CVP analysis, changing revenues and costs. Sunshine lours is a travel agency specializing in cruises between Toronto

Question:

CVP analysis, changing revenues and costs. Sunshine lours is a travel agency specializing in cruises between Toronto and Jamaica. It books passengers on Carib Cruises. Carib Cruises charges passengers $1,200 per round-trip ticket. Sunshine receives a commission of 8% ofthe ticket price paid by the passenger. Sunshine’s fixed costs are $26,400 per month. Its variable costs are $42 per ticket, including a $21.60 delivery fee by Emory Express. (Assume each ticket purchased is delivered in a separate package; thus the delivery fee applies to every indi¬

vidual ticket.)

Required 1. What is tlie number oftickets Sunshine must sell each month to

(a) break even and

(b) make a target operating income of $12,000?
2. Assume Emory Express offers to charge Sunshine only $14.40 per ticket delivered. How would accepting this offer affect your answers to

(a) and

(b) in requirement 1?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Cost Accounting A Managerial Emphasis

ISBN: 9780131971905

4th Canadian Edition

Authors: Charles T. Horngren, George Foster, Srikant M. Datar, Howard D. Teall

Question Posted: