"FunTime Cruiseline Data Set used for S7-1 through S7-10: FunTime Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime Cruiselines variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The companys relevant range extends to 20,000 monthly passengers.

S7-1 Compute unit contribution margin and contribution margin ratio (Learning Objective 1) Use the information from the FunTime Cruiseline Data Set to compute the following: What is the contribution margin per passenger? What is the contribution margin ratio? Use the unit contribution margin to project operating income if monthly sales total 17,000 passengers. Use the contribution margin ratio to project operating income if monthly sales revenue totals $595,000.

S7-2 Project change in income (Learning Objective 1) Use the information from the FunTime Cruiseline Data Set. If FunTime Cruiseline sells an additional 700 tickets, by what amount will its operating income increase (or operating loss decrease)?

S7-3 Find breakeven (Learning Objective 2) Use the information from the FunTime Cruiseline Data Set to compute the number of dinner cruise tickets it must sell to breakeven and the sales dollars needed to breakeven.

S7-4 Find target profit volume (Learning Objective 2) Use the information from the FunTime Cruiseline Data Set. If FunTime Cruiseline has a target operating income of $30,000 per month, how many dinner cruise tickets must the company sell?

S7-5 Changes in sales price and variable costs (Learning Objective 3) Use the information from the FunTime Cruiseline Data Set. Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to increase the number of passengers. Compute the new breakeven point in units and in sales dollars. Explain how changes in sales price generally affect the breakeven point. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could reduce its variable costs by no longer serving an appetizer before dinner. Suppose this operating change reduces the variable expense from $30 to $20 per passenger. Compute the new breakeven point in units and in dollars. Explain how changes in variable costs generally affect the breakeven point.

S7-6 Changes in fixed costs (Learning Objective 3) Use the information from the FunTime Cruiseline Data Set. Suppose FunTime Cruiseline embarks on a cost reduction drive and slashes fixed expenses from $210,000 per month to $150,000 per month. Compute the new breakeven point in units and in sales dollars. Is the breakeven point higher or lower than in S7-3? Explain how changes in fixed costs generally affect the breakeven point.

S7-7 Compute weighted-average contribution margin (Learning Objective 4) Use the information from the FunTime Cruiseline Data Set. Suppose FunTime Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course dinner on the upper deck. Assume that fixed expenses remain at $210,000 per month and that the following ticket prices and variable expenses apply: Regular Cruise Executive Cruise Sales price per ticket $50 $100 Variable expense per passenger $30 $ 40 Assuming that FunTime Cruiseline expects to sell four regular cruises for every executive cruise, compute the weighted-average contribution margin per unit. Is it higher or lower than a simple average contribution margin? (A simple average is calculated by adding both contribution margins per passenger together and dividing by two.) Why? Is it higher or lower than the regular cruise contribution margin calculated in S7-1? Why? Will this new sales mix cause FunTime Cruiselines breakeven point to increase or decrease from what it was when it sold only regular cruises?

S7-8 Continuation of S7-7: Breakeven (Learning Objective 4) Refer to your answer to S7-7. Compute the total number of dinner cruises that FunTime Cruiseline must sell to breakeven. Compute the number of regular cruises and executive cruises the company must sell to breakeven."