QueenQueen
Cruiseline offers nightly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for
$ 50$50
per passenger.
QueenQueen
?Cruiseline's variable cost of providing the dinner is
$ 20$20
per? passenger, and the fixed cost of operating the vessels? (depreciation, salaries, docking? fees, and other? expenses) is
$ 210 comma 000$210,000
per month. The? company's relevant range extends to
19 comma 00019,000
monthly passengers.
Compute the number of dinner cruise tickets it must sell to break even.
a. Use the income statement equation approach.
b. Use the shortcut unit contribution margin? approach, perform a numerical proof to ensure that your answer is correct.
c. Use your answers from? (a) and? (b) to determine the sales revenue needed to break even.
d. Use the shortcut contribution margin ratio approach to verify the sales revenue needed to break even.
a. Compute the number of dinner cruise tickets it must sell to break even using the income statement equation approach.
Using the basic income statement equation you determined above solve for the number of tickets to break even.
? - ? - ? = operating income
Number of dinner cruise tickets needed to break even is
nothing.
b. Use the shortcut unit contribution margin? approach, perform a numerical proof to ensure that your answer is correct.
(? + ? ) / ? = break even units
Perform a numerical proof to ensure that your answer is correct.
c. your answers from? (a) and? (b) to determine the sales revenue needed to break even.
Sales revenue needed to break even is
?$nothing
d.
Use the shortcut contribution margin ratio approach to verify the sales revenue needed to break even.
(? + ?) / ? = break even sales
Ans a | ||
Income statement Approach | ||
Sales-Variable cost- fixed cost=Operatingf income | ||
($50*U)-($20*U)-210000=0 | ||
210000/30U= U= | 700 | |
No. of dinner cruise ticket | 700 | |
ans b | ||
Unit contribution margin method | ||
Units sold=fixed expenses+Operating profit/CM per unit | ||
210000+0/30 | 700 | |
ans c | ||
sales revenue needed | $350,000 | |
700*$50 | ||
Ans d | ||
Sales in $=fixed expenses+Operating profit/CM per unit | ||
210000+0/.6 | 350000 | |
CM ratio 30/50 | 0.6 |
If any doubt please comment
Get Answers For Free
Most questions answered within 1 hours.