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Compute the total number of dinner cruises

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Reference no: EM133110549

Question - Suppose Excel Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course dinner on the upper deck. Assume that fixed expenses are $162,500 per month and that the following ticket prices and variable expenses apply:

 

Regular Cruise

Executive Cruise

Sale price per ticket

$60

$155

Variable expense per passenger

$45

$90

Assume that Excel Cruiseline expects to sell four regular cruises for every executive cruise. In this mix, the weighted-average contribution margin per cruise is $25.

Required -

a. Compute the total number of dinner cruises that Excel Cruiseline must sell to break even.

b. Compute the number of regular cruises and executive cruises the company must sell to break even.

Reference no: EM133110549

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