Question
Term 1 STANDARD Examination 2016 Foundations of Management Accounting ACCT20076 Page 8 of 11 Question 2 10 Marks Lifetime Escapes generates average revenue of $15,000
Term 1 STANDARD Examination 2016 Foundations of Management Accounting ACCT20076 Page 8 of 11 Question 2 10 Marks Lifetime Escapes generates average revenue of $15,000 per person on its 5-day package tours to wildlife parks in Kenya. The variable costs per person are as follows: Airfare $3,200 Hotel accommodations 6,200 Meals 1,200 Ground transportation 600 Park tickets and other costs 1,400 Total $12,600 Annual fixed costs total $1,140,000. a) Calculate the number of package tours that must be sold to break even. (5 marks) b) Calculate the revenue needed to earn a target operating income of $204,000. (5 marks) Term 1 STANDARD Examination
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