ACCM4100 - Management Accounting - Adelaide Based Tourperience Ltd Case Study - Break Even Point - Accounting Assignment Help

Assignment Task:

ACCM4100: Management Accounting Assignment Help

CASE STUDY USING EXCEL SPREADSHEET

You work for Adelaide-based Tourperience Ltd which provide tourists and visitors with ‘experiences’ of Adelaide and South Australia. Your manager is currently investigating introducing another product, which are ‘De-luxe’ helicopter rides over the Barossa Valley. Each trip would be 50km in total. Your manager wants you to use cost-volume-profit analysis in order to help assess the plan’s feasibility. She provides you with the following estimated data: Selling price per trip: $600 (total for 3 customers – trips only run with 3 customers) Costs: Fuel: $50 per trip Barossa ‘goodie bag’ per customer: $40 Helicopter rental per month: $20,000 Insurance per month (unlimited trips): $1,000 Pilot costs: $5,000 per month plus $100 per trip Maintenance costs are difficult to estimate but data from a similar company in a different location shows that these monthly costs were $11,000 when 5,000 kms were flown and $5000 when 1,500 kms were flown.

REQUIRED:

Calculate the following: 1) The Break-even point in trips per month 

2) The Break-even point in dollars of revenue per month 

3) Assuming a profit after tax requirement from the Helicopter trip business of $120,000 per year and a tax rate of 30%, calculate:

a) Trips required per month to obtain target profit 

b) Revenue required per month to obtain target profit 

Your manager has requested that the spreadsheet is easy to use for ‘What-if’ analysis – so she would like to be able to change some of the inputs to see the impact on the calculations above – for example, if the Helicopter were able to be rented more cheaply or the selling price was increased. Hence 6 Marks are allocated to ease of use and accuracy for ‘what-if’ analysis (which will also depend on the formulas used) are allocated for the general presentation of the spreadsheet.

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