What is the contribution margin per passenger

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Reference no: EM133417442

Question: Royal Hellenic Cruiseline offers nightly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for $60 per passenger, Royal Hellenic Cruiseline's variable cost of providing the dinner is $20 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $210,000 per month. The company's relevant range extends to 15,000 monthly passengers. What is the contribution margin per passenger? What is the contribution margin ratio? Use the unit contribution margin to project operating income if monthly sales total 10,000 passengers. Use the contribution margin ratio to project operating income if monthly sales revenue totals $500,000. Compute the operating leverage factor when Royal Hellenic Cruiseline sells 12,000 dinner cruises. If volume increases by 10%, by what percentage will operating income increase? If volume decreases by 5%, by what percentage will operating income decrease?

Reference no: EM133417442

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