Ruben intends to sell his customers a special round-trip airline ticket package.

Question

Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $150 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include $5,000 in advertising costs. For every $25,000 of ticket packages sold after break even, operating income will increase by Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $150 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include $5,000 in advertising costs. For every $25,000 of ticket packages sold after break even, operating income will increase by

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount Sales price per unit                       200.00 Less Variable Expenses per unit                     (150.00) Contribution Margin per unit                         50.00 CM Ratio=50/200                            0.25 Sale of ticket packages                   25,000.00 Operating income will increase by 25000*.25                   6,250.00

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