Pricing Plan 1 - $30 per person (a special pack will be included) Pricing Plan 2 - $25 per visitor (the special pack not to be included) Variable Costs per visitor Special Pack - $8 Zoo Consumables -...

Pricing Plan 1 - $30 per person (a special pack will be included)

Pricing Plan 2 - $25 per visitor (the special pack not to be included)

Variable Costs per visitor

Special Pack - $8

Zoo Consumables - $7

Zoo Expenses - $2

Total Fixed Costs - $200,000

REQUIRED:      Study the information above then answer the following questions.

• Using the CVP formula, calculate the number of units (and its dollar amount) for achieving
  
  
  
  1. Breakeven
  
  
  2. A profit of $30,000 for both plans.
  
  
  
  


• Calculate the Contribution Margin ratio for both plans.


• Describe the meaning of Contribution Margin ratio.


• Explain the relationship between Contribution Margin ratio and Number of Breakeven units.


• Explain why it is important to calculate Margin of Safety.


• State TWO examples of fixed cost in relation to the zoo.


• Write a report to Mr Zoo for recommending which pricing plan should be adopted. Your recommendation should include at least ONE piece of financial and ONE piece of non-financial information.