Ocean Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets s per passenger. Ocean Cruiseline's variable cost of providing the dinner is $20 per passenger, and the foxed cost of operating the vessels (depreciation, salaries, docking fees, and other e $210,000 per month. The company's relevant range extends to 15,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Ocean Cruiseline sells 8,750 dinner cruises b. If volume increases by 8%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Ocean Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor. Contribution margin Operating income Operating leverage factor

Ocean Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets s per passenger. Ocean Cruiseline's variable cost of providing the dinner is $20 per passenger, and the foxed cost of operating the vessels (depreciation, salaries, docking fees, and other e $210,000 per month. The company's relevant range extends to 15,000 monthly passengers. The breakeven sales are 7,000 tickets sold. a. Compute the operating leverage factor when Ocean Cruiseline sells 8,750 dinner cruises b. If volume increases by 8%, by what percentage will operating income increase? c. If volume decreases by 3%, by what percentage will operating income decrease? a. Compute the operating leverage factor when Ocean Cruiseline sells 8,750 dinner cruises. (Round your answer to one decimal place.) First, identify the formula, then compute the operating leverage factor. Contribution margin Operating income Operating leverage factor

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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Super Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $80 per passenger. Super Cruiseline's variable cost of providing the dinner is $40 per passenger, and the fixed cost of operating the vessels (depreciation, salaries, docking fees, and other expenses) is $240,000 per month. The company's relevant range extends to 18,000 monthly passengers. If Super Cruiseline sells an additional 600 tickets, by what amount will its operating income increase (or operating loss decrease)? First, identify the formula, then compute the operating income increase (or operating loss decrease). Operating =
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amounts with a $0 balance, make sure to enter " 0 " in the appropriate input field.) Now compute the breakeven point in sales dollars. Enter the formula, then compute the breakeven sales. (Enter the contribution margin ratio as a whole percent. For amounts with a $0 balance, make sure to enter " 0 " in the appropriate input field.)
Hammerhead Charters runs fishing trips out of the local port. Hammerhead charges $90 per trip for a half-day trip. Variable costs for Hammerhead total $40 per trip and the fixed costs are $18,000 per month. Hammerhead is subject to an income tax rate of 25 percent. Required: How many trips must Hammerhead sell to break even? How many trips must Hammerhead sell to earn a monthly operating profit of $15,000 after taxes?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the bus 7,000 miles and paid a total of $1,360 in June. In October. Able Transport paid $1,280 for the 5,000 miles driven. If Able Transport uses the high-low method to analyze costs, how much would Able Transport pay in December, if they drove 6,000 miles?
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