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?
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?
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
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Question
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.
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