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?

Question

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?

Quizplus · Accepted Answer

The Answer of 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?

Travel on Inc