Mr Zoo is planning to set up a mini Zoo in Howick. The following relates to different pricing plans of visiting the zoo and costs of running the zoo. Pricing Plan 1 - $30 per person (a special pack will be included) Pricing Plan 2 - $25 per visitor (the special pack not to be included) Variable Costs per visitor Special Pack - $8 Zoo Consumables - $7 Zoo Expenses - $2 Total Fixed Costs - $200,000 REQUIRED: Study the information above then answer the following questions. Explain the relationship between Contribution Margin ratio and Number of Breakeven units. Explain why it is important to calculate Margin of Safety. State TWO examples of fixed cost in relation to the zoo. Write a report to Mr Zoo for recommending which pricing plan should be adopted. Your recommendation should include at least ONE piece of financial and ONE piece of non-financial information.
Mr Zoo is planning to set up a mini Zoo in Howick. The following relates to different pricing plans of visiting the zoo and costs of running the zoo. Pricing Plan 1 - $30 per person (a special pack will be included) Pricing Plan 2 - $25 per visitor (the special pack not to be included) Variable Costs per visitor Special Pack - $8 Zoo Consumables - $7 Zoo Expenses - $2 Total Fixed Costs - $200,000 REQUIRED: Study the information above then answer the following questions. Explain the relationship between Contribution Margin ratio and Number of Breakeven units. Explain why it is important to calculate Margin of Safety. State TWO examples of fixed cost in relation to the zoo. Write a report to Mr Zoo for recommending which pricing plan should be adopted. Your recommendation should include at least ONE piece of financial and ONE piece of non-financial information.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter15: Decision Analysis
Section: Chapter Questions
Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...
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Mr Zoo is planning to set up a mini Zoo in Howick.
The following relates to different pricing plans of visiting the zoo and costs of running the zoo.
Pricing Plan 1 - $30 per person (a special pack will be included)
Pricing Plan 2 - $25 per visitor (the special pack not to be included)
Variable Costs per visitor
Special Pack - $8
Zoo Consumables - $7
Zoo Expenses - $2
Total Fixed Costs - $200,000
REQUIRED: Study the information above then answer the following questions.
- Explain the relationship between Contribution Margin ratio and Number of Breakeven units.
- Explain why it is important to calculate Margin of Safety.
- State TWO examples of fixed cost in relation to the zoo.
- Write a report to Mr Zoo for recommending which pricing plan should be adopted. Your recommendation should include at least ONE piece of financial and ONE piece of non-financial information.
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