Homework Chapter 7 Homework Question 3, 87-5 (similar to HW Score: 38.6%, 8 of 25 ports Part 2 Save Point 0.25 of 2 Lynch Contoh Undan Chand Developer Durys ponto 530 and then the concerto pas competence were de points 550.000 2 Aby domowych w De were 1206 10 www.com adece 540 Corre por Dan 20 31000 1000 W Part 20 Luxury 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 Luxury 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 Under these conditions, the breakeven point in tickets is 7,000 and the breakeven point in sales dollars is $350,000 1. 2. Suppose Luxury Cruiseline cuts its dinner cruise ticket price from $50 to $40 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 Luxury Cruiseline does not cut the price Luxury Cruiseline could reduce its variable costs by no longer serving an appetizer before dinner. Suppose this operating change reduces the variable expense from $20 to $10 per passenger Compute the new breakeven point in units and in dollars. Explain how changes in variable costs generally affect the breakeven point 1. Soy Cream come up with the team ** on with me Dormagen 7100 Notepote mecome the con pom tot CD Fontes 10000 x Requirements 1. Prepare the company's current contribution margin income statement 2. Calculate the change in operating income that would result from implementing each of the following independent strategy alternatives. Compare each alternative to the current operating income as you calculated in Requirement 1. Consider each alternative separately a. Alternative 1: The company believes volume will increase by 18% if salespeople are paid a commission of 5% of the sales price rather than the current $4 per unit b. Alternative 2: The company believes that spending an additional $8,000 on advertising would increase sales volume by 7% c. Alternative 3: The company is considering raising the selling price to $90, but believes volume would drop by 12% as a result. d. Alternative 4: The company would like to source the product from domestic suppliers who charge $6 more for each unit Management believes that the "Made in the USA"label would increase sales volume by 18% and would allow the company to increase the sales price by $6 per unit In addition, the company would have to spend an additional $8,000 in marketing costs to get the word out to potential customers of this change Print Done Tuin Coming 200 rsd brun bagchus moet a proof70 per char the wati conto che incides to touch the bag chair and Cream $170 The company is conchanged wito www.rechange wil dito come Requirement concurent continente per me to an en The wing Company Contributin Margin incone utenent . CH 2.00 Requirement? Crecho con the worst photo prima Competo me compromet a newcomer Alternativet te belevene by one or more Wing Company Gement uwag condhan c. med et store Atemte the combine wiceme by Tuttet Sealing Company Contribution Margin income fatement
