Edit 6:19 OF 25.0 vo KB/S LIED Hill 83 MPS 27 Task 2: 10 marks (a) The following information is provided by the firm's accounting department for the boat (with a capacity for up to 40 passengers in addition to crew) for sightseeing in vacation. All costs are shown in the following table: Fixed cost items per round trip Pay for tour guide Interest on company assets including boat $ 300 $225 Fuel $ 600 Vessel registration, maintenance and insurance $ 175 Captain's pay $ 800 Pay for catering and cleaning staff $ 400 Food costs $ 130 Other costs $20 Variable cost items per passenger per round trip If the price per passenger is $400, determine how many passengers are required to break even on each round trip. Determine the profit and profit-revenue ratio per round trip if the boat is filled to full capacity. Determine how many passengers are required to make a round-trip profit of $5,000. (b) Now suppose a private company can alternatively choose to lease the boat for a 2 -day the rest of the conference as a floating hotel at the dock. If the vessel is leased in this way, the following fixed cost items apply. Interest on company assets Fuel for harbour cruise Vessel registration, maintenance and insurance Captain's pay for harbour cruise Pay for catering and cleaning staff over conference $235 $100 $175 $ 225 $ 400 If the demand for the normal sightseeing service (see part a) is 15 passengers per round trip, determine whether the boat cruise company should lease the boat to the conference organisers or continue to offer the normal sightseeing service. (c) Now suppose the boat company realise their demand function is Q = 600 - 0.5*P. Also, its total cost of operation is TC = 2500 + 150Q. What is the new optimal price should the transportation firm charge according to marginal cost pricing method? Tools Mobile View Share Edit on PC III