Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with 1 and 2!! Super Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including

need help with 1 and 2!!
image text in transcribed
image text in transcribed
image text in transcribed
Super 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. Super 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. Suppose Super 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. 2. Assume that Super Cruiseline does not cut the price. Super 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. Suppose Buper Cruiseline euts ts dinner cuuse Edeet prise trom $60 ia $40 to increase the number of passengers. Cernpuae the new breakeven point in unis ard in sales dolars Extain how changes in seies price goneraly attect the breakeven point. bo unter "e? in the approoriate inpul fieds

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forest Management Auditing

Authors: Lucio Brotto

1st Edition

0367605872, 978-0367605872

More Books

Students also viewed these Accounting questions

Question

how can demographic cycle influence business cycle?

Answered: 1 week ago