Question

The cruise boat can carry up to 45 passengers. The company wants to know the minimum number of passengers needed per cruise to cover its costs. This number is called the break-even point. A formula for calculating the break-even point is: Break-even point = (fixed costs) ÷ (income per passenger – costs per passenger) The company collects the following data: N3402-WhaleWatch.png Based on this data, what is the minimum number of passengers needed per cruise, so that the cruise company can be sure it will make a profit?

Answer 1

fixed price costs
Crew salaries 350
fuel 120
overheads 170
Variable costs per passenger
refreshments $ 6.50
refund $ 3.64
Sales income
Average ticket $ 36 .40

Break-even point = (fixed costs) ÷ (income per passenger – costs per passenger)

Break-even point = (640) ÷ (36.40 – 10.14)
Break-even point = (640) ÷ (26.26)
Break-even point = (640) ÷ (1181.70)
Break-even point = $24.37