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# 1 Single Product CVP Grand Canyon Adventures sells individual tickets for $ 7 5 for walking tours of the Grand Canyon. Each ticket has
# Single Product CVP
Grand Canyon Adventures sells individual tickets for $ for walking tours of the Grand Canyon. Each ticket has variable costs including lunch of $ per ticket. The company has total fixed costs of $
Required:
a What is the CM per unit?
b How many tickets must be sold to breakeven?
x
x
c How many units of tickets must be sold to earn a target income of $
d If unitlevel costs increase to $ per ticket, what decrease in annual fixed costs must be achieved to keep the same breakeven point as calculated in part b
e Back to original assumptions: What is the CM ratio?
f Using the CM ratio, what level of revenue is needed to breakeven?
g What level of revenue is needed to earn a target income of $
h How many tickets must be sold to earn aftertax income of $with a tax rate of
i If tickets are sold what is equivalent to $ of sales what is the margin of safety in units? In dollars?
j If tickets are sold, what is the DOL? If units are sold? If units are sold?
k Assume that tickets are sold, if sales increase by what will happen to profit? Assume that tickets are sold, if sales increase by what will happen to profit?
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