Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 6-day, 5-night trip to Cancun and a 6-day, 5-night trip to Jamaica, have the following characteristics:

Package Specifications	Cancun				Jamaica				Cost Data
Oceanfront room; number of nights		5				5			$	25	/night
Meals:
Breakfasts		5				5			$	5	/ea
Lunches		3				5			$	4	/ea
Dinners		4				0			$	10	/ea
Scuba diving trips		4				4			$	19	/ea
Water skiing trips		9				6			$	14	/ea
Airfare (round trip from Miami)		1				1			$	195	(Cancun),
									$	270	(Jamaica)
Transportation to and from airport		1				1			$	19	(Cancun),
									$	14	(Jamaica)

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 $640, 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 (%)		%

Take-a-Breaks management believes that it must drop the price on the Cancun and Jamaica trips to $710 and $640, 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 (%)		%		%