Cruiseline offers nightly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for

$50 per passenger. Ocean 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 $207,000 per month. Under these?conditions, the?break-even point in tickets is 6,900

and the?break-even point in sales dollars is $345,000.Suppose Ocean Cruiseline embarks on a?cost-reduction drive and slashes fixed expenses from $207,000 per month to $183,000 per month.

1) Is the? break-even point higher or lower than under the original? conditions? Explain how changes in fixed costs generally affect the? break-even point.

2)

The break-even point is after the fixed expenses are reduced than under the original conditions. All else being equal, in fixed costs will decrease the break-even point while in fixed costs will increase the break-even point