Use the information from the Luxury Cruiseline Data Set to compute the following: a. What is the

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Use the information from the Luxury Cruiseline Data Set 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 10,000 passengers.
d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $650,000.
Luxury Cruiseline offers nightly dinner cruises off the coast of Miami, San Francisco, and Seattle. Dinner cruise tickets sell for $120 per passenger. Luxury Cruiseline's variable cost of providing the dinner is $48 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 15,000 monthly passengers.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Managerial Accounting

ISBN: 978-0132890540

3rd edition

Authors: Karen W. Braun, Wendy M. Tietz

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