Question

1. What is the minimum number of passengers that Wellness Getaways must sign up by November 20 to break even with the cruise

Answer 1

Answer: 227 passengers

Step-by-step explanation:

The number of Passengers needed to breakeven is calculated by dividing the fixed costs by the contribution margin.

Fixed costs are;

= 65,000 + 10,000 + 220,000

= $295,000

The cost of maintaining the passengers (variable costs) = $200

The amount paid per passenger is $1,500 on average

Breakeven point = 295,000 / ( 1,500 - 200)

= 227 passengers