Evaluate the total number of dinner cruises

Assignment Help Financial Accounting

Reference no: EM1374806

Evaluate unit contribution margin and contribution margin ratio

****Use the subsequent data for problems 1,2,3,4,9, &10 ****

Luxury Cruiseline offers nightly dinner cruises off coast of Miami, San Francisco, and Seattle. Dinner Cruise tickets sell for $120 per passenger. Luxury Cruise line's variable cost of providing dinner is $48 per passenger, and fixed cost of operating vessels (depreciation, docking fees, salaries, other expenses) is $270,000 per month. The company's relevant range extends to 15,000 monthly passengers.

1. a - Evaluate what is contribution margin per passenger?
b - Evaluate what is the contribution margin ratio?
c - Use unit contribution margin to project operating income if monthly sales total 10,000 passengers.
d - Use contribution margin ratio to project operating income if monthly sales revenue totals $650,000.

2. Project change in income

3. Determine Breakeven

Use the information from Luxury Cruiseline Data Set to evaluate the number of dinner cruise tickets it must sell to break even and sales dollars needed to break even.

4. Determine target profit volume

Use the information from Luxury Cruiseline Data Set. If Luxury Cruiseline has a target operating income of $97,200 per month, Find how many dinner cruise tickets must the company sell?

5. Evaluate weighted-average contribution margin.

Use the information from the Luxury Cruiseline Data Set. Assume Luxury 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. Suppose that fixed expenses remain at $270,000 per month and that the subsequent ticket prices and variable expenses apply:

Regular Cruise Executive Cruise
Sales price per ticket ................................................ $120 $240
Variable expense per passenger ............................. $48 $180

Suppose that Luxury Cruiseline expects to sell four regular cruises for each executive cruise, evaluate the weighted-average contribution margin per unit. Is it higher or lower than a simple average contribution margin and why? Is it higher or lower than the regular cruise contribution margin evaluated Problem #1? Why? Will this new sales mix cause Luxury Cruiseline's breakeven point to decrease or increase from what it was when it sold only regular cruises?

6. Continuation of #9 Breakeven

Refer to your answer to # 9.

A) Evaluate the total number of dinner cruises that Luxury Cruiseline must sell to break even.

B) Determine the number of regular cruises and executive cruises company must sell to breakeven.

Reference no: EM1374806

Questions Cloud

Determine the days sales uncollected for both companies : Determine the days sales uncollected for both companies as of the end of the present period. Which company is doing a better job in managing the collection of its receivables?

Evaluate the tax on the total cumulative gifts : How do I evaluate the tax on the total cumulative gifts of 1,548,000? The answer is given to us which is 577,400 but we require to show how we got to that answer. Please help.

Differences among the flexible as well as the static budget : You are in a job interview as well as your possible employer asks you to define the differences between the flexible as well as the static budget and to explain which you would recommend for a small business and why

Explain how to conduct an analysis of clients insurability : As part of an insurance business's training program, participants learn explain how to conduct an analysis of clients' insurability. Which of participants would you judge to be capable.

Evaluate the total number of dinner cruises : Evaluate the total number of dinner cruises that Luxury Cruiseline must sell to break even and determine the number of regular cruises and executive cruises company must sell to breakeven.

Drawing a supply and demand graph : Since 1997, at least three million vehicles have been recalled due to air bag related troubles. Of these, roughly half were due to troubles of the sort that only time and road experience are likely to reveal.

Allocate production capacity to encounter demand : Josie Gall's firm has developed the subsequent supply, demand and cost and inventory data. Allocate production capacity to encounter demand at a minimum cost the transportation method.

Describe price-break inventory model : Assume that annual demand for a part is 40,000 units, ordering cost. Using a price-break inventory model which of subsequent is optimal order quantity.

Deliberate the importance of information technology planning : Deliberate the importance of information technology planning as well as control processes to protect confidential information and prevent major loss of information.

User Account

All Pages