A tour company is planning a bus trip to a local museum. The company will lease a bus from a local bus owner for $400 and estimates that it will spend $15.00 per person for admission and lunch. Which of the following volume/price alternatives will allow the firm to avoid losing money on the trip?
A. 20 customers at $30.00 each.
B. 30 customers at $27.50 each.
C. 40 customers at $25.00 each.
D. 50 customers at $22.50 each
E. 60 customers at $20.00 each.
| Alternate | Price per person | Variable expense per person | Contribution margin per person | Number of persons | Total contribution margin | Fixed expenses | Profit |
| A | 30 | 15 | 15 | 20 | 300 | 400 | - 100 |
| B | 27.50 | 15 | 12.50 | 30 | 375 | 400 | - 25 |
| C | 25 | 15 | 10 | 40 | 400 | 400 | 0 |
| D | 22.50 | 15 | 7.50 | 50 | 375 | 400 | - 25 |
| E | 20 | 15 | 5 | 60 | 300 | 400 | - 100 |
Alternative C will allow the firm to avoid losing money on the trip
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A tour company is planning a bus trip to a local museum. The company will lease a bus from a local bus owner for $400 an...
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