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2 marksCost-Volume-Profit (CVP) Analysis

CAPE Accounting Unit 2 · 2013 · Paper 2 · Question 3(a)(i)

Fanciful Enterprises is planning an all-inclusive cruise and fun event package in the Bahamas. Fixed venture costs total 900 000 (venue hire, rooms, flights, advertising). Variable costs for buffet meals are estimated at 900 per ticket, with a proposed selling price of $1 200 per ticket.

Calculate the contribution margin ratio.

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Other parts of this question

  1. 3(a)(ii)Calculate the number of tickets that must be sold to break even in units and in dollars.[3 marks]
  2. 3(a)(iii)Calculate the number of tickets that must be sold to earn a target profit of $50 000.[2 marks]
  3. 3(b)Identify four non-financial factors that can influence Fanciful Enterprises' ticket pricing decision.[4 marks]
  4. 3(c)(i)Explain the payback period project appraisal technique.[3 marks]
  5. 3(c)(ii)Explain the internal rate of return (IRR) project appraisal technique.[3 marks]
  6. 3(c)(iii)Explain the net present value (NPV) project appraisal technique.[3 marks]
  7. 3(d)(i)Compute the labour rate variance.[4 marks]
  8. 3(d)(ii)Compute the labour efficiency variance.[4 marks]
  9. 3(d)(iii)Compute the material price variance.[3 marks]
  10. 3(d)(iv)Compute the material quantity variance.[4 marks]

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