Prepare contribution margin income statements at those volume levels.
Compute West Coast's monthly operating income or operating loss if revenues are $500,000 and if they are $800,000.
1. Compute revenue and variable expenses for each cruise.
2. Use the income statement equation approach to compute the number of cruises the Royal Blue must make each year to break even.
3. Use the contribution margin approach to compute the number of cruises needed each year to earn $$85,000. Is this profit goal realistic? Give your reason.
4. Prepare the royal Blue contribution margin income statement for 80 cruises for the year. Report only two categories of expenses: variable and fixed.
This solution calculates income statement information for different cruise companies and scenarios.