Use the information from the Luxury Cruiseline Data Set.
a. Compute the operating leverage factor when Luxury Cruiseline sells 12,000 dinner cruises.
b. If volume increases by 10%, by what percentage will operating income increase?
c. If volume decreases by 5%, by what percentage will operating income decrease?
Luxury Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $120 per passenger. Luxury Cruiseline's variable cost of providing the dinner is $48 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $270,000 per month. The company's relevant range extends to 15,000 monthly passengers.