Use the information from the Northern Cruiseline Data Set. Suppose Northern Cruiseline decides to offer two types of dinner cruises: regular cruises and executive cruises. The executive cruise includes complimentary cocktails and a five-course dinner on the upper deck.
Assume that fixed expenses remain at $210,000 per month and that the following ticket prices and variable expenses apply:
Assuming that Northern Cruiseline expects to sell four regular cruises for every executive cruise, compute the weighted-average contribution margin per unit. Is it higher or lower than a simpleaverage contribution margin? Why? Is it higher or lower than the regular cruise contribution margin calculated in S7-1? Why? Will this new sales mix cause Northern Cruiseline’s break-even point to increase or decrease from what it was when it sold only regular cruises?

  • CreatedApril 30, 2015
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