Calculate the number of tours that must be sold

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Reference no: EM133502732

Question: Explorer Tours Ltd generates average revenue of $5,000 per person on its one-week package tours to wildlife parks in China. Total annual fixed costs are $50,000. The variable costs per person are: Airfare=$1400 Hotel accommodations=$1000 Meals=$300 Ground transportation=$200 Park tickets and other costs=$100 Total = $3000 Question 3

Required: (a) Calculate the number of tours that must be sold in order to break even.

(b) Calculate the amount of revenue needed to earn a target profit of $90,000.

(c) If fixed costs increase by $30,000, what decrease in variable cost per person must be achieved to maintain the breakeven point calculated in (a) above?

Reference no: EM133502732

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