Answer the following questions using the information below:
Campesi intends to sell his customers a special round-trip airline ticket package.He is able to purchase the package from the airline carrier for $250 each.The round-trip tickets will be sold for $300 each and the airline intends to reimburse Campesi for any unsold ticket packages.Fixed costs include $7500 in advertising costs.
-How many ticket packages will Campesi need to sell in order to achieve $60 000 of operating profit?
A)367 packages
B)434 packages
C)1100 packages
D)1350 packages

Question

Quizplus · Accepted Answer

To achieve an operating profit of $60,000, Campesi needs to cover the fixed costs and the desired profit. The contribution margin per ticket is $50 ($300 selling price - $250 cost). The total amount needed is $67,500 ($60,000 profit + $7,500 fixed costs). Dividing $67,500 by the $50 contribution margin per ticket gives 1,350 packages.

Answer the Following Questions Using the Information Below