(Answered) Question - suppose ocean cruiselines decides to offer two

Accounting

Question - Suppose Ocean Cruiselines decides to offer two types of dinner cruises: Regular cruises and Executive cruises. The Executive cruise includes complimentary cocktails and five course dinner on the upper deck. Assume that fixed expenses remain at $270,000 per month and that the following tickets prices and variable expense apply.

Cruise Exec

Sale price per ticket $ 50 $100

Variable expense per person $20 $40

Ocean Cruiselines expects to sell four regular cruises for every one executive cruise. In this one the weighted average contribution margin is $36.00.

A. Compute the total number of dinner cruise that Ocean Cruiselines must sell to break even.

B. Compute the number of regular cruises and executive cruises that Ocean Cruislines must sell to break even.

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