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:

The Cancun trip sells for $750, and the Jamaica trip sells for $690, 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-Breaks management believes that it must drop the price on the Cancun and Jamaica trips to $710 and $650, respectively, in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.

Package Specifications Oceanfront room; number of nights Meals: Cancun Jamaica Cost Data $ 30ight $5/ea $ 7/ea $ 10/ea $ 15/ea $ 10/ea 175 (Cancun), 250 (Jamaica) $ 15 (Cancun), s 10 (Jamaica) Breakfasts Lunches Dinners Scuba diving trips Water skiing trips Airfare (round trip from Miami) 2 5 Transportation to and from airport