CVP analysis, service firm. Wildlife Escapes generates average revenue of $4,000 per person on its five-day package tours to wildlife parks in Kenya. The variable costs per person are:
Airfare $1,500
Hotel accommodations 1,000
Meals 300
Ground transportation 600
Park tickets and other costs 200
Total $3,600
Annual fixed costs total $480,000.
a. Calculate the number of package tours that must be sold to break even.
b. Calculate the revenue needed to earn a target operating income of $100,000
c. If fixed costs increase by $24,000, what decrease in variable costs must be achieved to maintain the breakeven point calculated in requirement 1?