Ask Question
20 March, 14:58

FunTime 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. 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 relevant range extends to 20,000 monthly passengers If FunTime Cruiseline has a target operating income of $30,000 per month, how many dinner cruise tickets must the company sell? First, identify the formula, then compute the target sales in units.

+2
Answers (1)
  1. 20 March, 16:19
    0
    the target sales in units is 12,000 dinner cruise tickets

    Explanation:

    For FunTime Cruiseline to reach its target operating income of $30,000, it must first break - even then make a profit to the extent of $30,000.

    This statement is presented in the formula below:

    Target Sales - Units = (Fixed Cost + Target Profit) / Contribution per Unit

    = ($210,000+$30,000) / ($50 - $30)

    = $ 240,000 / $ 20

    = 12,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “FunTime Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers