Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the
Question:
Northampton City Tours (NCT) offers personalized historical and architectural tours in a large midwestern city and the local suburbs. NCT charges $350 per trip to or from the airport. The variable cost for a tour totals $42 for fuel, driver, and so on. The monthly fixed cost for NCT is $13,860.
Required
a. How many tours must NCT sell every month to break even?
b. NCT’s owners believe that 50 tours is a reasonable forecast of the average monthly demand. What is the margin of safety in terms of the number of tours?
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Saud Ur Rehman
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