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new customer? Obj. 4 cruise. The price per pas MAD 11-4 Analyze Atlantis Cruise Lines in the Greek Aegean Sea. The shin Atlantis Cruise Lines offers luxury, one-week cruise packages in the has a capacity for 1,200 people. Atlantis averages 1.000 passengers per cruise. The price Der senger is $6,000. Costs associated with a cruise are as follows: $1,200,000 1,500,000 400,000 $3,100,000 Variable costs per cruise: Crew to serve passengers Food Amenity and excursion Total variable cost per cruise Fixed costs per cruise: Crew to run ship Depreciation expense Fuel Total fixed cost per cruise $1,500,000 120,000 50,000 $1,670,000 Atlantis proposes an early booking program to help increase the number of passengers per cruise. Under the proposed early booking program, the first 300 passengers to book a cruise Chapter 11 Differential Analysis and Product Pricing 559 will receive a $1.500 discount off the normal price for the cruise. Atlantis expects this program to increase the number of passengers from 1.000 to 1,180 per cruise. The proposed booking program will be launched with $15,000 of advertising per cruise. a. Determine the operating income for a cruise. b. Determine the variable cost per passenger for each variable cost item. c. Determine the contribution margin per passenger d. Prepare a differential analysis showing the differential profit per cruise between the existing plan (Alternative 1) and the proposed early booking program (Alternative 2). Is the new booking program financially acceptable

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