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Multi-product Suppose Bay Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and
Multi-product Suppose Bay 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 as listed. Sales price per ticket Variable cost per passenger Regular Cruise $50 $20 Executive Cruise $130 $40 1. Assuming that Bay Cruiseline expects to sell four regular cruises for every executive cruise, compute the weighted-average contribution margin per unit. 2. Compute the total number of dinner cruises that Bay Cruiseline must sell to break-even. Compute the number of regular cruises and executive cruises to break-even.
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