Question - Cost-Volume-Profit
Canyon Escape sells individual tickets for $75 for walking tours of the Grand Canyon. Unit-level cost, including lunch, are $15 per ticket; fixed cost total $200,000 per year
Required
a. How many tours must be sold to break even?
b. What level of revenue is needed to earn a target income of $42,000?
c. If unit-level costs increase to $20 per tour, what decrease in annual fixed costs must be achieved to keep the same break even point as calculated in requirement (a)?