- Question 3 20 Marks Anthelion Ltd Is A Scenic Helicopter Tour Company Located At New York The Company Is Committed To 1 (38.91 KiB) Viewed 25 times
QUESTION 3 (20 MARKS) Anthelion Ltd is a scenic helicopter tour company located at New York. The company is committed to provide the highest level of professionalism and safety tour for all visitors looking to take helicopter tours. The selling price of the helicopter tours is £120 ticket and the variable costs average to about £40 per person. Anthelion Ltd. has annual fixed costs of £840,000. Required: a. How many tours must the company conduct in a month to break even? [4 MARKS] b. Calculate the contribution margin ratio. [2 MARKS) c. Compute the sales revenue (in value and in number of tours) needed to produce a target net profit of £50,000 per month? [4 MARKS) d. Based on your answers in (c) above, compute the margin of safety (in £). What does margin of safety represent? [4 MARKS) c. Explain whether the actions below will increase, decrease, or not affect the company's break-even point i. An increase in ticket price. [2 MARKS) ii. A decrease in the number of tours sold. [2 MARKS] iii. The termination of a salaried clerk (no replacement is planned). [2MARKS]