Question
Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 5-day, 4-night trip to Cancun and a 7-day, 6-night
Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 5-day, 4-night trip to Cancun and a 7-day, 6-night trip to Jamaica, have the following characteristics:
| Package Specifications | Cancun | Jamaica | Cost Data | ||||||||
| Oceanfront room; number of nights | 4 | 6 | $ | 8 | /night | ||||||
| Meals: | |||||||||||
| Breakfasts | 4 | 6 | $ | 2 | /ea | ||||||
| Lunches | 6 | 6 | $ | 8 | /ea | ||||||
| Dinners | 8 | 0 | $ | 10 | /ea | ||||||
| Scuba diving trips | 5 | 4 | $ | 20 | /ea | ||||||
| Water skiing trips | 6 | 7 | $ | 15 | /ea | ||||||
| Airfare (round trip from Miami) | 1 | 1 | $ | 230 | (Cancun), | ||||||
| $ | 305 | (Jamaica) | |||||||||
| Transportation to and from airport | 1 | 1 | $ | 20 | (Cancun), | ||||||
| $ | 15 | (Jamaica) | |||||||||
The Cancun trip sells for $1,000, and the Jamaica trip sells for $940, 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 $950 and $900, respectively, in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
The ASQ Certified Food Safety And Quality Auditor
Authors: Steven Wilson
4th Edition
1951058186, 978-1951058180
