Super Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including​ Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for...


Super Cruiseline offers nightly dinner cruises departing from several cities on the eastern coast of the United States including​ Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. Super ​Cruiseline's variable cost of providing the dinner is $20 per​ passenger, and the fixed cost of operating the vessels​ (depreciation, salaries, docking​ fees, and other​ expenses) is $270,000 per month. The​ company's relevant range extends to 19,000 monthly passengers.



Use this information to compute the​ following:


a. What is the contribution margin per​ passenger?

b. What is the contribution margin​ ratio?

c. Use the unit contribution margin to project operating income if monthly sales total 16,000 passengers.

d. Use the contribution margin ratio to project operating income if monthly sales revenue totals $520,000.


Jun 02, 2022
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