Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question Help S7-5 (similar to) Ocean Cruiseline offers nightly dinner Cruises departing from several cities on the eastern coast of the United States including Charleston,

image text in transcribed
Question Help S7-5 (similar to) Ocean Cruiseline offers nightly dinner Cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria Dinner Cruise tickets sell for $50 per passenger Ocean Cruiseline's variable cost of providing the dinner is $20 per passenger, and the foved cost of operating the vessels (depreciation, sataries, 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 Ocean 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 Ocean Cruiseline does not cut the price Ocean 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 indoors Explain how changes in variable costs generally affect the breakeven point 1. Suppose Ocean Cruiseline cuts its dinnee cruise ticket price from $50 to $40 to increase the number of passengers. Computo the new breakeven point in units and in sales dollars. Explain how changes in sales price generally affect the breakeven point Begin with the breakeven point in units. Enter the formula, then compute the breakeven point. (Round your final answers up to the mastest whole number. For amounta with a 50 balance, make sure to enter in the appropriate input field) - Breakeven units

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

Students also viewed these Accounting questions