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Suppose FunTime Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course
Suppose FunTime Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course dinner on the upper deck. Assume that fixed expenses remain at $210,000 per month and that the following ticket prices and variable expenses apply (Click the icon to view the ticket prices and expenses.)Assuming that FunTime Cruiseline expects to sell four regular cruises for every executive cruise; compute the weighted-average contribution margin per unit. Is it higher or lower than a simple average contribution margin? (A simple average is calculated by adding both contribution margins per passenger together and dividing by two.) Why? Is it higher or lower than the regular cruise contribution margin of $20? Why? Will this new sales mix cause FunTlme Cruisellne's breakeven point to increase or decrease from what it was when it only sold regular cruises? Data table Regular Cruise Executive Cruise Sale price per ticket. . . . . . $ 50 100 Variable expense per passenger $ 30 $ 40Assuming that FunTime Cruiseline expects to sell four regular cruises for every one executive cruise, compute the weightedaverage contnhution margin per unit. Determine the formula, then complete the table one section at a time. Less: Weighted-average contribution margin per unit Assuming that FunTime lCruiseline expects to sell tour regular cruises for every one executive cruise: compute the weighted-average contribution margin per unit. Determine the formula, then complete the table one section at a time. I 'l Contribution margin Contribution margin per ticket Sale price per ticket Sales mix 6- Variable cost per ticket Clear all m
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