Question
reak-even number of passengers for a cruise Ocean Escape Cruise Lines has a boat with a capacity of 1,200 passengers. An eight-day ocean cruise involves
reak-even number of passengers for a cruise
Ocean Escape Cruise Lines has a boat with a capacity of 1,200 passengers. An eight-day ocean cruise involves the following costs:
Crew$240,000Fuel60,000Fixed operating costs800,000The variable costs per passenger for the eight-day cruise include the following:
Meals$900Variable operating costs400The price of the cruise is $2,400 per passenger.
a.Determine the break-even number of passengers for the eight-day cruise.
b.Assume 900 passengers booked the cruise. What would be the profit or loss for the cruise?
$
c.Assume the cruise was booked to capacity. What would be the profit or loss for the cruise?
$
d.If the cruise cannot book enough passengers to break even, how might the cruise line respond?
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