Answer the Following Questions Using the Information Below

question 188

Multiple Choice

Answer the following questions using the information below:
Ruben intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $150 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Ruben for any unsold ticket packages. Fixed costs include $5,000 in advertising costs.
-What is the contribution margin per ticket package?

• A) $50
• B) $100
• C) $150
• D) $200

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Definitions:

Market

A venue or medium where buyers and sellers come together to exchange goods, services, or financial instruments.

Coupon Rate

The percentage annually paid as interest on a bond, relative to its face value.

Market Interest Rate

The prevailing rate of interest determined by supply and demand in the money market.

Par

Typically refers to a face value of a bond or stock that is set at issuance, or the stated value of a currency.