Question

Coast Cruseline offers nightly dinner cruises departing from several otes on the east coast of the United States including Charleston, Baltimore, and Alexandria Dinner Cruise tickets all or 550 per passenger Coast Cruisin's variable cost of providing the dinner is 120 per passenge, and the fed cost of operating the vessels depreciation, salaries, docking fees, and other expenses) is $210.000 per month. The company's relevant range extends to 12.000 monthly passengers Compute the number of dinneruise tickets Coast Cruisine must sell to breakeven and the sales dollars needed to breakeven Compute the number of inneruise tickets Coast Cuisine must sell to breakeven. Use the shortcut unit contribution margin approach First desty the formula then compute the breakeven sales in Com b oForamounts with a banca re in the progre ) even units Compute r neded to breakeven Usere shortcut un contribution marginato approach

Answer 1

(Target profit+Fixed costs)/Contribution Margin per unit = Breakeven units

(0+210,000)/(50-20)

= 7,000 passengers

Contribution Margin Ratio = Contribution Margin/Sales

= 30/50

= 60%

(Target profit+Fixed costs)/Contribution Margin Ratio = Break even Sales

= 210,000/60%

= $350,000