Question 1. A holiday company, based in Hong Kong, offers a series of 20 different international package holidays throughout the season. As a result of the Covid pandemic recent take-up of the holidays has been variable. The management are focusing on three particular holidays for the coming season because of concern over their viability. The present analysis of costs and revenues shown below is based on full take-up of each holiday package (100 customers), though this is believed to be unlikely, and the management have estimated that on average these holiday will be only 70% taken up. The costs of the local couriers will not change irrespective of the number of customers. The costs of air travel are also fixed and are based on a block booking of seats for the season. The booking with the airline has already been confirmed and cannot be changed. All accommodation costs of the hotel and meals are variable with the number of passengers. The commission paid to the agents is at a rate of 10% on all holidays and is exactly proportional to the price of the holiday. The office overheads, in the table above, are allocated over all the company's different package holidays based on the number of customers. They are semi-variable or mixed costs and an analysis of these costs for past years (before the pandemic) has shown the following trend: 601502 equired: (a) Estimate the variable and fixed cost components of the office overheads. Present the revenues, variable costs and contribution per passenger and the overall 'profitability' of each holiday package, using whatever presentation you consider appropriate. What is the break-even number of customers required for each holiday? (35 marks) (b) Briefly explain relevant costs for decision making. Interpret the results of your analysis in (a) and identify any shortcomings of the original analysis presented in the