OutbackOutback Escapes generates average revenue of $5,600 per person on its 5-day package tours to wildlife parks in Kenya. The variable costs per person are as follows:

Annual fixed costs total $560,000

1.	Calculate the number of package tours that must be sold to break even.

2.	Calculate the revenue needed to earn a target operating income of $105,000

3.	If fixed costs increase by $28,000,what decrease in variable cost per person must be achieved to maintain the breakeven point calculated in requirement 1?

4.

The general manager at OutbackOutback Escapes proposes to increase the price of the package tour to $6,200 to decrease the breakeven point in units. Using information in the originalproblem, calculate the new breakeven point in units. What factors should the general manager consider before deciding to increase the price of the package tour?

Airfare

$1,700

Hotel accommodations

1,500

Meals

500

Ground transportation

300

Park tickets and other costs

200

Total

$4,200