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Calculate the contribution margin ratio for both plans

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Reference no: EM132113011

Question - Mr Zoo is planning to set up a mini Zoo in Howick.

The following relates to different pricing plans of visiting the zoo and costs of running the zoo.

Pricing Plan 1 - $30 per person (a special pack will be included)

Pricing Plan 2 - $25 per visitor (the special pack not to be included)

Variable Costs per visitor

Special Pack - 8%

Zoo Consumables - $7

Zoo Expenses - $2

Total Fixed Costs - $200,000

REQUIRED: Study the information above then answer the following questions.

Using the CVP formula, calculate the number of units (and its KINA amount) for achieving

1) Breakeven

2) A profit of $30,000 for both plans.

3) Calculate the Contribution Margin ratio for both plans.

Reference no: EM132113011

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