Problem 4-13

Travel On Inc. sells luggage. They sell a duffle bag, a carry-on suitcase and a deluxe suitcase. The price and variable cost for each type of luggage is listed below.

The total fixed costs for Travel On Inc. equals $60,000. For every 8 duffle bags Travel On Inc sells it sells 3 carry-on suitcases and 1 deluxe suitcase.

Required:

A. Calculate the package contribution margin. $

B. Calculate the break-even point in units for duffle bags, carry-on suitcases and deluxe suitcases.

	Duffle bags	Carry-on suitcases	Deluxe suitcases
Break-even point in units

C. If Travel On Inc. has a target income for the coming year of $300,000, how many packages will the company have to sell? packages