Essays on Organizing Excursions for Tourists - Costs and Selling Price Assignment

Download free paperFile format: .doc, available for editing

The paper “ Organizing Excursions for Tourists - Costs and Selling Price” is an appropriate example of a finance & accounting assignment. You are living in El Calafate, Patagonia, nearby one of the most beautiful glaciers in the world, the Pé rito Moreno.   You want to organize excursions for tourists to the glacier.   The tourists will be picked up at their hotel(s) in the morning, then they will be taken to the glacier where a picnic is served, and after the visit, you will take them back to their hotel(s). Costs and selling price: The break-even point. First, you have to determine your fixed and variable costsFixed costs. You will need: An office: rent 30 $ per month------------ 360 $ per yearInsurance: ------------------------------ 40 $ per yearAdvertising: -------------------------------- 1,000 $ Per yearOffice supplies: ---------------------------- 600 $ per yearTelephone: --------------------------------- 500 $ per yearDepreciation on station wagon: 6,666.67 $Your salary ---------------------------------- 6,000 $ per yearTOTAL: ------------------------------------15,166.67 $ per yearDepreciation of the station wagon = $20,000/3 years =$6,666.67Your operational revenue from sales was 30 000 $ last year.

And you also know that you sold 1000 tours last year. What is your selling price?

Selling price = Total revenue/ number of tours =$30,000/1000 =$30 per tourQuestion 1What is your Contribution margin per tour? Contribution margin = Revenue/customer-variable cost/customer=$30-$17.125= $12.875/tourVariable costs One tour will be no longer than one day. A casual driver's salary will be 10$ per day all charges included. 30 liters per day cost 50 cents per literFor lunch, each tourist will cost 8 $ per dayAssumption- the company will operate 365days and hence the 1,000 tours are spread throughout the year. Therefore, variable cost per tour/number of tours assuming there is at least one tour on any given day and hence the above expenses are incurred daily. Total variable cost = $10*365 +(30*. 5)*365+ 8*1000= $3,650+$5,475+$8,000=$17,125Variable cost per tour=$17,125/1,000 =$17.125

Download free paperFile format: .doc, available for editing
Contact Us