LiveIt Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $50 per passenger.

Live It 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 $270,000 per month.

The company's relevant range extends to 17,000 monthly passengers.

Use this information to compute the following:

1. What is the contribution margin per passenger?
2. What is the contribution margin ratio?
3. Use the unit contribution margin to project operating income if monthly sales total 14,000 passengers.
4. Use the contribution margin ratio to project operating income if monthly sales revenue totals $520,000

USE THE CONTRIBUTION MARGIN (CVP) INCOME STATEMENT FORMAT Sales Price $ Variable Costs 50 20 Contribution Margin $ 30 Fixed Costs $ 270,000 The contribution margin is 60% If 14,000 units are sold: Contribution Margin per passenger 14000 $ Fixed Costs 420,000 within the relevant range (aka: Capacity) =30 * 14,000 270,000 Operating Income $ 150,000 Income if sales are $520,000 $ 42,000 =520000 * 60%270000