Answer the following questions using the information below:
Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $150 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include $5,000 in advertising costs.
-How many ticket packages will Ruben need to sell in order to achieve $60,000 of operating income?
A) 367 packages
B) 434 packages
C) 1,100 packages
D) 1,300 packages

Question

Quizplus · Accepted Answer

To achieve $60,000 operating income, Ruben needs to cover fixed costs and desired income. The contribution margin per package is $50 ($200 - $150). The equation is: ($5,000 + $60,000) / $50 = 1,300 packages.

Answer the Following Questions Using the Information Below