The writer is very fast, professional and responded to the review request fast also. Thank you.
You work for Adelaide-based Tourperience Ltd which provide tourists and visitors with ‘experiences’ ofAdelaide 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:
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)
2 marks are allocated for the general presentation of the spreadsheet.
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