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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 64 $61/night
Meals:
Breakfasts 64 $10/ea
Lunches 75 $15/ea
Dinners 64 $25/ea
Scuba diving trips 32 $81/ea
Water skiing trips 42 $56/ea
Airfare (round trip from Miami)11 $300(Cancun),
$525(Jamaica)
Transportation to and from airport 11 $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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