Question

Wildlife Escapes generates average revenue of $9,200 per person on its five-day package tours to wildlife parks in Kenya. The variable costs per person are
Airfare .............. $3,500
Hotel accommodations .... 1,200
Meals ............. 480
Ground transportation ....... 920
Park tickets and other costs ..... 240
Annual fixed costs total ........ $1,287,000
REQUIRED
1. Calculate the number of package tours that must be sold to break even.
2. Calculate the revenue needed to earn a target operating income of $214,500.
3. If fixed costs increase by $40,500, what decrease in variable costs must be achieved to maintain the breakeven point calculated in requirement 1?


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  • CreatedJuly 31, 2015
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