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Wildlife Escapes Generates Average Revenue

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Description Amount
Airfare \$1,500
Hotel accommodations 1,000
Meals 300
Ground transportation 600
Park tickets and other costs 200
Total \$3,600

Annual fixed costs \$480,000

Wildlife Escapes generates average revenue of \$4,000 per person on its five-day tours of top wildlife parks in Kenya. The variable costs per person are

1. Calculate the number of package tours that must be sold to break even.
2. Calculate the revenue needed to earn a target operating income of \$100,000.
3. If fixed costs increased by \$24,000, what decrease in variable cost per person must be achieved to maintain the breakeven point in requirement 1?

Solution Preview

Description Amount
Airfare \$1,500
Hotel accommodations 1,000
Meals 300
Ground transportation 600
Park tickets and other costs 200
Total \$3,600

Annual fixed costs \$480,000

Wildlife Escapes generates average revenue of \$4,000 per person on its five-day tours of top wildlife parks in Kenya. The variable ...

Solution Summary

This solution is comprised of a detailed explanation to calculate the number of package tours that must be sold to break even.

\$2.19