Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Dom's Fishing provides fishing tours to tourists from Topsail Island, North Carolina. Tickets cost $140 each. Dom's incurs the following costs: begin{tabular}{|l|l|r|} hline 5 &
Dom's Fishing provides fishing tours to tourists from Topsail Island, North Carolina. Tickets cost $140 each. Dom's incurs the following costs: \begin{tabular}{|l|l|r|} \hline 5 & \multicolumn{2}{|c|}{ Variable Costs per Customer } \\ \hline 6 & Bait and gear & $60.00 \\ \hline 7 & Overhead & 25.00 \\ \hline 8 & Water and snacks & 15.00 \\ \hline 9 & Selling and Administrative & 2.00 \\ \hline 10 & Total & $102.00 \\ \hline 11 & \end{tabular} Required: a) Compute the monthly break-even point in units (tickets sold). b) If Dom's is subject to a 21% income tax rate, compute number of units (ticket sales) required for an after-tax profit of $20,000. Dom's Fishing provides fishing tours to tourists from Topsail Island, North Carolina. Tickets cost $140 each. Dom's incurs the following costs: Dom's Fishing provides fishing tours to tourists from Topsail Island, North Carolina. Tickets cost $140 each. Dom's incurs the following costs: \begin{tabular}{|l|l|r|r|r} \hline 5 & \multicolumn{2}{|c|}{ Variable Costs per Customer } & \multicolumn{2}{|c|}{ Fixed Costs per Month } \\ \hline 6 & Bait and gear & $60.00 & Operations & $50,000 \\ \hline 7 & Overhead & 25.00 & Selling and Administrative & 12,500 \\ \hline 8 & Water and snacks & 15.00 & Total & $62,500 \\ \hline 9 & Selling and Administrative & 2.00 & & \\ \hline 10 & Total & $102.00 & & \\ \hline 11 & & & & \end{tabular} Assume that 2,200 tickets are sold in June. Required: a) Prepare a contribution income statement for the month. b) Determine the unit contribution margin and contribution margin ratio
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started