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Break-even with Opportunity Costs 25% Cost...

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Accounting

Break-even with Opportunity Costs 25%
Cost Behavior 25%
Multiple Product Break-even 25%
NPV (extra credit) 15%
Sunk Costs 25%
115%
Guatemala. Here are their estimates (based on 2,000 passengers per cruise and 25 cruises per year):
PER CRUISE
Variable Costs Fixed Costs
Labor 750,000 150,000
Food 750,000 75,000
Fuel 650,000
Port fees and services 125,000
Marketing, ads, promotion 350,000
Supplies 500,000 150,000
Totals 2,000,000 1,500,000
a. Assuming that the two-week Alaskan cruise will be priced at $2,000 per passenger, please calculate
the break-even number of passengers per cruise based on the data above.
b. What do the Lincoln Alumni need to consider beyond these estimates, and if they included this consideration,
what would happen to the break-even point? Would there be an issue if the max capacity of the ship was 2000 passengers?
HINT: Please calculate the OPPORTUNITY COST and compare against its capacity.

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