Travel On Inc.sells luggage.They sell a duffle bag,a carry-on suitcase and a deluxe suitcase.The price and variable cost for each type of luggage is listed below.
The total fixed costs for Travel On Inc.equals $60,000.For every 8 duffle bags Travel On Inc sells it sells 3 carry-on suitcases and 1 deluxe suitcase.
Required:
A.)Calculate the package contribution margin.
B.)Calculate the break-even point in units for duffle bags,carry-on suitcases and deluxe suitcases.
C.)If Travel On Inc.has a target income for the coming year of $300,000,how many packages will company have to sell?
D.)Based on your answer in Part C,prepare a contribution margin income statement for the coming year.
E.)What is the company's margin of safety in packages?
Correct Answer:
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B.)$60,000/1,200 = 50 packages 50 p...View Answer
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