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

$50

per passenger.

Super

Cruiseline's variable cost of providing the dinner is

$20

per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is

$210,000

per month. The company's relevant range extends to

16,000

monthly passengers. The breakeven units are

7,000

tickets sold. If

Super

Cruiseline sells

8,750

dinner cruises, compute the margin of safety

a. in units (dinner cruise tickets).

b. in sales dollars.

c. as a percentage of sales.

a. If

Super

Cruiseline sells

8,750

dinner cruises, compute the margin of safety in units (dinner cruise tickets).

Begin by determining the formula, then compute the margin of safety in units (dinner cruise tickets).

Sale price per unit

-

Variable cost

=

Margin of safety in units

-

=

b. If

Super

Cruiseline sells

8,750

dinner cruises, compute the margin of safety in sales dollars.

Begin by determining the formula, then compute the margin of safety in sales dollars.

=

Margin of safety in dollars

=

c. If

Super

Cruiseline sells

8,750

dinner cruises, compute the margin of safety as a percentage of sales.

Begin by determining the formula, then compute the margin of safety as a percentage of sales. (Round the percentage to the nearest tenth percent, X.X%.)

					Margin of safety as a
				=	percentage of sales

=

%