Use the information from the Crystal Cruiseline Data Set.
a. Compute the operating leverage factor when Crystal Cruiseline sells 8,750 dinner cruises.
b. If volume increases by 10%, by what percentage will operating income increase?
c. If volume decreases by 5%, by what percentage will operating income decrease?

Crystal Cruiseline Data
Crystal Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $ 50 per passenger. Crystal 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 $ 210,000 per month. The company’s relevant range extends to 14,000 monthly passengers.

  • CreatedAugust 27, 2014
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