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Northern Cruiseline offershtly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets...

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Accounting

Northern Cruiseline offershtly dinner cruises off the coast of Nanaimo and Victoria. Dinner cruise tickets sell for $ 80 per passenger. Northern Cruiseline's variable cost of providing the dinner is $ 30 per passenger, and the fixed cost of operating the vessels(depreciation, salaries, docking fees, and other expenses) is $ 246 comma 000 per month. Under these conditions, the break-even point in tickets is 4 comma 920 and the break-even point in sales dollars is $393 comma 600.
Suppose Northern Cruiseline embarks on a cost-reduction drive and slashes fixed expenses from $ 246 comma 000 per month to $ 237 comma 000 per month.
1.
Compute the new break-even point in units and in sales dollars.
2.
Is the break-even point higher or lower than under the original conditions? Explain how changes in fixed costs generally affect the break-even point.

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