Question
2015 Royal Kona Tour Information Tour Lanai Villager Sunset Price per passenger $78 $83 $107 Fixed Costs (annual) boat depreciation $110,000 $100,000 $100,000 boat maintenance
| 2015 Royal Kona Tour Information | |||
| Tour | Lanai | Villager | Sunset |
| Price per passenger | $78 | $83 | $107 |
| Fixed Costs (annual) | |||
| boat depreciation | $110,000 | $100,000 | $100,000 |
| boat maintenance | $42,000 | $29,000 | $30,000 |
| insurance | $5,400 | $5,400 | $5,400 |
| share of hotel costs | $21,000 | $21,000 | $21,000 |
| advertising | $18,000 | $18,000 | $18,000 |
| Variable Costs (per trip) | |||
| fuel | $165 | $135 | $225 |
| tour guide cost | $175 | $100 | $160 |
| passenger food | $225 | $115 | $350 |
| docking fees | $78 | $100 | - |
| Number of trips per year | 223.0 | 148.0 | 210.0 |
| Mean passengers per trip | 27.0 | 26.4 | 27.6 |
| Annual Profit | $129,849.00 | $84,297.60 | $291,422.00 |
| Added trip profit | $1,463.00 | $1,741.20 | $2,218.20 |
| Profit margin added per trip | 69% | 79% | 75% |
| Return on investment | 66% | 49% | 167% |
Q5: As an added complication, the food cost for each trip is being charged so that it is not fixed per trip but will be dependent upon the number of passengers on each trip. In other words, if food for one passenger is x, food for 2 passengers would be 2x and so on. Which this change (and given that the current price and other fixed costs remain the same), what is the minimum mean number of passengers needed to be profitable in terms of having a positive return on investment? Alternatively, is there a tool you could use for determining the number of passengers needed to make the trip profitable? If so, what tool is that?
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Principles Of Cost Accounting
Authors: Edward J. Vanderbeck
14th Edition
0324374178, 978-0324374179
