Travel On Inc. sells luggage. they sell a duffle bag, a carry-on suitcase and a deluxe suitcase.
Question:
Price Variable Cost
Duffle Bag R100 R25
Carry-on R180 40
Deluxe 300 120
“The total fixed costs for Travel On Inc. equals R60,000. For every 8 duffle bags, Travel On Inc sells it sells 3 carry-on suitcases and 1 deluxe suitcase. “ with the following
The total fixed costs for Travel On Inc. equals R60,000. For every 8 duffle bags. Travel On Inc sells, 3 carry-on suitcases and 1 deluxe suitcase are sold.
Required:
1.) Calculate the package contribution margin.
2.) Calculate the break-even point in units for duffle bags, carry-on suitcases and deluxe suitcases.
3.) If Travel On Inc. has a target income for the coming year of R300,000, how many packages will the company have to sell?
4.) Based on your answer in Part C, prepare a contribution margin income statement for the coming year.
5.) What is the company’s margin of safety in packages?
Managerial Decision Modeling Business Analytics With Spreadsheet
ISBN: 9781501515101
4th Edition
Authors: Nagraj Balakrishnan, Barry Render, Ralph Stair, Charles Munson