Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

please explain 9.25 NRV Method, Contribution Margin, Further Processing for a Service Deluxe Tours, a tour organizer, leased a cruise liner for a special around-the-world

image text in transcribed

please explain

9.25 NRV Method, Contribution Margin, Further Processing for a Service Deluxe Tours, a tour organizer, leased a cruise liner for a special around-the-world tour. The 02 03 LO4REQUIRED lease cost is $200,000. Two classes of passengers are booked on the tour: first class and economy class. The total revenue from the 100 first-class passengers is $200,000 and from the 200 economy-class passengers is $200,000. Other costs for the two classes of passengers amount to $30,000 for first class and $30,000 for economy class. A. How much of the lease cost will be allocated to first-class passengers if the net realizable value method is used? B. What is the contribution margin generated by first-class passengers? C. When the cruise liner managers are deciding whether to increase the number of first-class rooms, which joint cost allocation method is best to use? Explain

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions