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B Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for
B Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for 150 each. The round-trip tickets will be sold for 200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include 5,000 in advertising costs. (60 marks in total) B.1 What is the contribution margin per ticket package? A) 50 B) 100 C) 150 D) 200 (15 marks) B.2 How many ticket packages will Ruben need to sell to break even? A) 34 packages B) 50 packages C) 100 packages D) 150 packages (15 marks) B.3 How many ticket packages will Ruben need to sell in order to achieve 60,000 of operating income? A) 367 packages B) 434 packages C) 1,100 packages D) 1,300 packages (15 marks) B.4 Briefly outline some the assumptions and limitations of Cost-volume profit analysis in bullet points. (15 marks)
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