FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east-ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinnercruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providingthe dinner is $30 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 rel-evant range extends to 20,000 monthly passengers. Cost-Volume-Profit Ana57-3 Find breakeven (Learning Objective 2)S7-4 Find target profit volume (Learning Objective 2)57-2 Project change in income (Learning Objective 1)additional 700 tickets, by what amount will its operating income increase (or operatingUse the information from the FunTime Cruiseline Data Set. If FunTime Cruiseline sells anloss decrease)?ahe information from the FunTime Cruiseline Data Set to compute the number of din-Use ise tickets it must sell to breakeven and the sales dollars needed to breakeven.Uke the information from the FunTime Cruiseline Data Set. If FunTime Cruiseline has aưget operating income of $30,000 per month, how many dinner cruise tickets must thecompany sell?

FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east- ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciatio- salaries, docking fees, and other expenses) is $210,000 per month. The company's rel- evant range extends to 20,000 monthly passengers.

FunTime Cruiseline offers nightly dinner cruises departing from several cities on the east- ern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime Cruiseline's variable cost of providing the dinner is $30 per passenger, and the fixed cost of operating the vessels (depreciatio- salaries, docking fees, and other expenses) is $210,000 per month. The company's rel- evant range extends to 20,000 monthly passengers.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

See similar textbooks

Similar questions

Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the tour bus 4,000 miles and paid a total of $1,250 in March. In April, they paid $970 for 3.000 miles. What is the variable cost per mile if Able Transport uses the high-low method to analyze costs?
Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
Super Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. Super 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 $270,000 per month. The company's relevant range extends to 19,000 monthly passengers. Use this information to compute the following: a. What is the contribution margin per passenger? b. What is the contribution margin ratio? c. Use the unit contribution margin to project operating income if monthly sales total 16,000 passengers. d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $520,000.
Super Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $80 per passenger. Super Cruiseline's variable cost of providing the dinner is $40 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $240,000 per month. The company's relevant range extends to 14,000 monthly passengers. Use this information to compute the following: a. What is the contribution margin per passenger? b. What is the contribution margin ratio? c. Use the unit contribution margin to project operating income if monthly sales total11,000 passengers. d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $515,000.
Atlantis Cruise Lines offers luxury, one-week cruise packages in the Greek Aegean Sea. The ship has a capacity for 1,200 people. Atlantis averages 1,000 passengers per cruise. The price per passenger is $6,000. Costs associated with a cruise are as follows: Variable costs per cruise: Crew to serve passengers $1,200,000 Food 1,500,000 Amenity and excursion 400,000 Total variable cost per cruise $3,100,000 Fixed costs per cruise: Crew to run ship $1,500,000 Depreciation expense 120,000 Fuel 50,000 Total fixed cost per cruise $1,670,000 Atlantis proposes an early booking program to help increase the number of passengers per cruise. Under the proposed early booking program, the first 300 passengers to book a cruise will receive a $1,500 discount off the normal price for the cruise. Atlantis expects this program to increase the number of passengers from 1,000 to 1,180 per cruise. The proposed booking…
Ocean Escape Cruise Lines has a boat with a capacity of 1,200 passengers. An eight-day ocean cruise involves the following costs: Crew $240,000 Fuel 60,000 Fixed operating costs 800,000 The variable costs per passenger for the eight-day cruise include the following: Meals $900 Variable operating costs 400 The price of the cruise is $2,400 per passenger. a. Determine the break-even number of passengers for the eight-day cruise.passengers b. Assume 900 passengers booked the cruise. What would be the profit or loss for the cruise?$ loss c. Assume the cruise was booked to capacity. What would be the profit or loss for the cruise? $ profit d. If the cruise cannot book enough passengers to break even, how might the cruise line respond? All the above.
Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent. Required: How many trips must Hammerhead sell to break even? How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $350 per round-trip, and one that has made 2,000 round-trips in the year incurs an average operating cost of $300 per round-trip. Q.If Reisen Travel expects each helicopter to make, on average, 1,200 round-trips in the coming year, what should its estimated operating budget for the helicopter fleet be?
VITRAN Bus Services purchases diesel fuel from Domino Gas Supply. In addition to fuel cost, Domino Gas Supply charges VITRAN Bus Services $250 per order to cover the expenses of delivering and transferring the fuel to VITRAN Bus Services storage tanks. The lead time for new shipment from Domino Gas Supply is 10 days, the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year and the annual usage of fuel is 150,000 gallons. VITRAN Bus Services buses operate 300 days a year. The VITRAN Bus Services storage tanks a capacity of 15,000 gallons. Should VITRAN Bus Services considers expanding the capacity of its storage tanks? What is the reorder point?