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Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages,...

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Accounting

Take $-$ a $-$ Break Travel Company offers spring break travel packages to college students. Two of its packages, a $7 -$ day, $6 -$ night trip to Cancun and a $5 -$ day, $4 -$ night trip to Jamaica, have the following characteristics:

Package Specifications Cancun Jamaica Cost Data

Oceanfront room; number of nights $6 4$ $ $61 /$ night

Meals:

Breakfasts $6 4$ $ $10 /$ ea

Lunches $7 5$ $ $15 /$ ea

Dinners $6 4$ $ $25 /$ ea

Scuba diving trips $3 2$ $ $81 /$ ea

Water skiing trips $4 2$ $ $56 /$ ea

Airfare $($ round trip from Miami $) 1 1$ $ $300 ($ Cancun $),$

$ $525 ($ Jamaica $)$

Transportation to and from airport $1 1$ $ $40 ($ Cancun $),$

$ $38 ($ Jamaica $)$

The Cancun trip sells for $ $1, 860,$ and the Jamaica trip sells for $ $1, 620,$ and both packages allow two bags to be checked for free.

Required:

$1 .$ What are the current profit margins on both trips?

$2 .$ Take $-$ a $-$ Breaks management believes that it must drop the price of each trip by $ $106$ in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.

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