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FunTime Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of...

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FunTime Cruiseline offers nightly dinner cruises departing from several cities on the East Coast of the United States including Charleston, Baltimore, and Alexandria. Dinner cruise tickets sell for $50 per passenger. FunTime 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 $210,000 per month. Under these conditions, the breakeven point in tickets is 10,500 and the breakeven point in sales dollars is $525,000. 1. Suppose FunTime Cruiseline cuts its dinner cruise ticket price from $50 to $45 to increase the number of passengers. Compute the new breakeven point in units and in sales dollars. Explain how changes in sales price generally affect the breakeven point. 2. Assume that FunTime Cruiseline does not cut the price. FunTime Cruiseline could reduce its variable costs by no longer serving an appetizer before dinner. Suppose this operating change reduces the variable expense from $30 to $20 per passenger. Compute the new breakeven point in units and in dollars. Explain how changes in variable costs generally affect the breakeven point

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