Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

assy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria Dinner cruise

image text in transcribed

assy Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria Dinner cruise tickets sell for $80 per passenger. Classy Cruiseline's variable cost of providing the dinner is 40 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $240,000 per month. The company's relevant range extends to 11,000 monthly passengers. The breakeven sales are 6,000 tickets sold. . Compute the operating leverage factor when Classy Cruiseline sells 8,000 dinner cruises, . If volume increases by 6%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Classy Cruiseline sells 8,000 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor. Operating leverage factor b. If volume increases by 6%, by what percentage will operating income increase? (Round the percentage to the nearest whole percent.) % The percentage that operating income will increase is c. If volume decreases by 3%, by what percentage will operating income decrease? (Round the percentage to the nearest whole percent.) % The percentage that operating income will decrease is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Describe how to train managers to coach employees. page 404

Answered: 1 week ago

Question

Discuss the steps in the development planning process. page 381

Answered: 1 week ago