REQUIREMENT 2:

Take-a-Breaks management believes that it must drop the price on the Cancun and Jamaica trips to $760 and $710, respectively, in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. (Round percentage answers to 1 decimal place.)

	Cancun		Jamaica
Profit margin
Profit margin (%)		%		%

Exercise 13-30 Target Costing in a Service Firm [LO 13-1) Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics: Jamaica Cancun 6 Cost Data $ 24ight Package Specifications Oceanfront room number of nights Meals! Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miani) 6 9 4 5 0 3 3 1 $ 4/ea $ 7/ea $ 10/ea $ 16/ea $ 11/ea $ 180 (Cancun), $ 255 (Jamaica) $ 16(Cancun). $ 11 (Jamaica) Transportation to and from airport 1 The Cancun trip sells for $800, and the Jamaica trip sells for $740, and both packages allow two bags to be checked for free. Required: 1. What are the current profit margins on both trips? 2. Take-a-Break's management believes that it must drop the price on the Cancun and Jamaica trips to $760 and $710, respectively, in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What are the current profit margins on both trips? (Round percentage answers to 1 decimal place.) Cancun Jamaica Profit margin Profit margin (%) % % Required 1 Required 2 >