accounting Suppose Great 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 tupper deck. Assume that fixed expenses are $114,000 per month and that the following ticket prices and variable expenses applyExecutive CruiseRegular Cruise3010Sale price per ticketVariable expense per passenger$$CELE$$Assume that Great Cruiseline expects to sell three regular cruises for every executive cruise. In this mix, the weighted-average contribution margin per cruise is $30.a. Compute the total number of dinner cruises that Great Cruiseline must sell to break evenb.Compute the number of regular cruises and executive cruises the company must sell to break evenWeighted avg. CM per unit3013575a. Compute the total number of dinner cruises that Great Cruiseline must sell to break evenFirst, enter the formula and then compute the total number of dinner cruises that Great Cruiseline must sell to break-even. (For amounts with a zero balance, make sure to enter "0" in theappropriate cell. Abbreviations used: avg. CM-average contribution margin.)Operating incomeDFixed expenses114000(S1$b. Compute the number of regular cruises and executive cruises the company must sell to break evenGreat Cruiseline must sell 2.280 regular cruises and 1.520 executive cruises to break even.Break-even units3,800

Breakeven units are the number of items or services that must be sold in order for a firm to pay all…

Answered: Suppose Great Cruiseline decides to be…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2MAD

See similar textbooks

Similar questions

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.
Carnival (CCL) has recently placed into service some of the largest cruise ships in the world. One of these ships, the Carnival Breeze, can hold up to 3,600 passengers, which can cost $750 million to build. Assume the following additional information: There will be 340 cruise days per year operated at a full capacity of 3,600 passengers. The variable expenses per passenger are estimated to be $100 per cruise day. The revenue per passenger is expected to be $280 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $90,000,000 per year. The ship has a service life of 10 years, with a residual value of $60,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376…
Assume Intervale Railway is considering hiring a reservations agency to handle passenger reservations. The agency would charge a flat fee of $13,000 per month, plus $3 per passenger reservation. What is the total reservation cost if 200,000 passengers take the trip next month? $613,000 $3.07 $600,000 $13,000
You are a Toronto based tour operator with a series of flights starting up from Vancouver to Montego Bay, Jamaica. The charter will operate every Sunday and the duration of your package is 7 nights. The aircraft has 179 seats and the anticipated load factor is 81%. The first rotation is Nov 06, 2022, and the last flight rotation is on April 30, 2023. Operating costs are $100,000 for each live/live and $85,000 for rotations with a ferry portion. Air taxes per person are $220.…
Break-even number of passengers for a cruiseOcean Escape Cruise Lines has a boat with a capacity of 1,200passengers. An eight-day ocean cruise involves the following costs: CrewFuelFixed operating costs $240,00060,000800,000 The variable costs per passenger for the eight-day cruise include thefollowing: MealsVariable operating costs $900400 The price of the cruise is $2,400 per passenger.A. Determine the break-even number of passengers for the eight- day cruise.B. Assume 900 passengers booked the cruise. What would be the profit or loss for the cruise?C. Assume the cruise was booked to capacity. What would be theprofit or loss for the cruise?D. If the cruise cannot book enough passengers to break even, howmight the cruise line respond?
Break-even number of passengers for a cruise 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 opeating cost 800,000 The variable costs per passenger for the eight-day cruise include the following: meals $900 variable operating cost 400 The price of the cruise is $2,400 per passenger.A. Determine the break-even number of passengers for the eight-day cruise.B. Assume 900 passengers booked the cruise. What would be the profit or loss for the cruise?C. Assume the cruise was booked to capacity. What would be the profit or loss for the cruise?D. If the cruise cannot book enough passengers to break even, how might the cruise line respond?
Carnival Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Carnival Breeze, can hold up to 3,600 passengers, and it can cost $800 million to build. Assume the following additional information: There will be 330 cruise days per year operated at a full capacity of 3,600 passengers. The variable expenses per passenger are estimated to be $110 per cruise day. The revenue per passenger is expected to be $250 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $20,000,000 per year. The ship has a service life of 10 years, with a residual value of $200,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513…
Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $350.00 per trip to or from the airport. The variable cost for a tour totals $42.00 for fuel, driver, and so on. The monthly fixed cost for NCT is $13,860. Required: a. How many tours must NCT sell every month to break even? b. NCT's owners believe that 50 tours is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of tours?
O Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Bellwether, can hold up to 2,500 passengers and it can cost $500 million to build. Assume the following additional information: There will be 300 cruise days per year operated at a full capacity of 2,500 passengers. The variable expenses per passenger are estimated to be $90 per cruise day. The revenue per passenger is expected to be $450 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $70,200,000 per year. The ship has a service life of 10 years, with a residual value of $80,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402…

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS