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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 17
CVP and Margin of Safety
Rainbow Tours gives walking tours of Springfield. Rainbow charges $20 per person for the tour and incurs $8 in variable costs for labor, drinks, and maps. The monthly fixed costs for Rainbow Tours are $1,800.
Required
a. How many tours must Rainbow sell every month to break even
b. Rainbow Tours's owner believes that 200 people a month will sign up for the walking tour. What is the margin of safety in terms of the number of people signing up for the tour
Rainbow Tours gives walking tours of Springfield. Rainbow charges $20 per person for the tour and incurs $8 in variable costs for labor, drinks, and maps. The monthly fixed costs for Rainbow Tours are $1,800.
Required
a. How many tours must Rainbow sell every month to break even
b. Rainbow Tours's owner believes that 200 people a month will sign up for the walking tour. What is the margin of safety in terms of the number of people signing up for the tour
Explanation
Verified
Verified
Selling price per unit is $20
...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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