Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to in- crease the number of passengers. Compute the new breakeven point in units and in sales dollars. Explain how changes in sales price generally affect the breakeven point. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could re- duce its variable costs by no longer serving an appetizer before dinner. Suppose this operating change reduces the variable expense from $30 to $20 per passenger. Com- pute the new breakeven point in units and in dollars. Explain how changes in variable costs generally affect the breakeven point.
Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to in- crease the number of passengers. Compute the new breakeven point in units and in sales dollars. Explain how changes in sales price generally affect the breakeven point. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could re- duce its variable costs by no longer serving an appetizer before dinner. Suppose this operating change reduces the variable expense from $30 to $20 per passenger. Com- pute the new breakeven point in units and in dollars. Explain how changes in variable costs generally affect the breakeven point.
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
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Question
![57-5 Changes in sales price and variable costs (Learning Objective 3)
Use the information from the FunTime Cruiseline Data Set.
. Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to in-
crease the number of passengers. Compute the new breakeven point in units and in
sales dollars. Explain how changes in sales price generally affect the breakeven point.
. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could re-
duce its variable costs by no longer serving an appetizer before dinner. Suppose this
operating change reduces the variable expense from $30 to $20 per passenger. Com-
pute the new breakeven point in units and in dollars. Explain how changes in variable
costs generally affect the breakeven point.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59d5c3f3-0725-4ac4-9f46-d93c888de04a%2F2c137dfb-7455-4207-b58c-085078e5310a%2Fwdmvy8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:57-5 Changes in sales price and variable costs (Learning Objective 3)
Use the information from the FunTime Cruiseline Data Set.
. Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to in-
crease the number of passengers. Compute the new breakeven point in units and in
sales dollars. Explain how changes in sales price generally affect the breakeven point.
. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could re-
duce its variable costs by no longer serving an appetizer before dinner. Suppose this
operating change reduces the variable expense from $30 to $20 per passenger. Com-
pute the new breakeven point in units and in dollars. Explain how changes in variable
costs generally affect the breakeven point.
![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 (depreciation,
salaries, docking fees, and other expenses) is $210,000 per month. The company's rel-
evant range extends to 20,000 monthly passengers.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F59d5c3f3-0725-4ac4-9f46-d93c888de04a%2F2c137dfb-7455-4207-b58c-085078e5310a%2Frac2psi_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 (depreciation,
salaries, docking fees, and other expenses) is $210,000 per month. The company's rel-
evant range extends to 20,000 monthly passengers.
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