Horison View (Pty.) Ltd. ("Horison View") is an entity which operates a sea cruise line. Cruise trips are supplied to the general public at the Cape Town harbour. The following cruises are on offer: Standard cruises A standard cruise ticket amounts to R900 per person. This gives admission to a 1.5 hour cruise. The standard cruises are offered at 8:30am, 11:00am, 14:00pm and 16:00pm. Horison View admits 55 passengers during each standard cruise and standard cruises are usually sold-out. Variable costs per ticket amounts to R470. Operational costs include the R28 000 per month salary of the ship's captain. Luxury cruises A luxury cruise ticket amounts to R2 800 per person. This includes a 2.5-hour trip during which passengers are spoilt in luxury and with beautiful views. 3 Luxury cruises per day are provided by Horison View - one which departs at 9:30am, another at 14:00pm and the last at 18:30pm. During each trip a maximum of 40 passengers can be taken, however, the ticket sales usually amount to a \( 90 \% \) capacity for each trip. The following is a breakdown of the applicable costs: For luxury cruises the ship's captain salary is decreased to R25 600 per month. Additional information: - Direct labour hours are utilised as the allocation basis for overheads. Horison View's employees work during the full duration of a trip as well as 30 minutes group of passengers. - Horison View purchased the ship two completed financial years ago with an instalment agreement. The ship had a purchase price of R1 900000 which Horison View fully financed with the instalment agreement. According to the terms, an interest rate of \( 12.8 \% \) compounded annually are applicable and instalments must be paid annually at the end of each period over a period of 5 years. - According to Horison View's property, plant and equipment policy, the ship is depreciated over 6 years on the straight-line basis. The ship is estimated to have a scrap value of R28 500 at the end of its useful life. - Horison View is operational for 6 days during a week, 48 weeks per financial year. - Assume 4 weeks per month. - Assume that no tickets will be sold of the other cruise type on offer during each of the cruises' calculations - i.e., Horison will either provide Standard cruises only, or Luxury cruises only, during a financial year. 2.3. Horison View (Pty.) Ltd.'s management wishes to make an annual profit of R8.5 million. Advise management how many Standard tickets or Luxury tickets, respectively, should be sold annually to achieve this goal. (6 marks) 2.4. Calculate the safety margin ratio of Standard cruise tickets and Luxury cruise tickets respectively. Assume the current quantity of sales are maintained in the future. (7 marks) 2.5. Separately for Standard cruises and Luxury cruises, calculate the net profit for Standard cruises and Luxury cruises during the next financial year. Assume that the current quantity of sales are maintained. Start the calculations by drafting a marginal costing statement. \[ \text { ( } 8 \text { marks) } \] 2.6. Based on all the above results, advise Horison View (Pty.) Ltd. which of the two cruises the entity should offer bearing in mind the assumption that the product lines are mutually exclusive.