A tour company is planning a bus trip to a local museum. The company will lease a bus from a local bus owner for $400 and estimates that it will spend $15.00 per person for admission and lunch. Which of the following volume/price alternatives will allow the firm to avoid losing money on the trip?
A) 20 customers at $30.00 each.
B) 30 customers at $27.50 each.
C) 40 customers at $25.00 each.
D) 50 customers at $22.50 each
E) 60 customers at $20.00 each.

Question

Quizplus · Accepted Answer

To avoid losing money, the total revenue must be equal to or greater than the total cost. The cost is $400 (bus) + $15 per person. For 40 customers at $25 each, revenue is $1000, and cost is $1000, so they break even.

A Tour Company Is Planning a Bus Trip to a Local