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Take-a-Break Travel Company offers spring break travel packages to college students
Take-a-Break Travel Company offers spring break travel packages to college students. Two of its packages, a 7-day, 6-night trip to Cancun and a 5-day, 4-night trip to Jamaica, have the following characteristics:
| Package Specifications | Cancun | Jamaica | Cost Data | |
| Oceanfront room; number of nights | 6 | 4 | $ 55 | /night |
| Meals: | ||||
| Breakfasts | 6 | 4 | $ 10 | /ea |
| Lunches | 7 | 5 | $ 15 | /ea |
| Dinners | 6 | 4 | $ 25 | /ea |
| Scuba diving trips | 3 | 2 | $ 75 | /ea |
| Water skiing trips | 4 | 2 | $ 50 | /ea |
| Airfare (round trip from Miami) | 1 | 1 | $ 375 | (Cancun), |
| $ 550 | (Jamaica) | |||
| Transportation to and from airport | 1 | 1 | $ 25 | (Cancun), |
| $ 40 | (Jamaica) | |||
The Cancun trip sells for $1,750, and the Jamaica trip sells for $1,500, and both packages allow two bags to be checked for free.
Required:
1. What are the current profit margins on both trips?
2. Take-a-Break's management believes that it must drop the price of each trip by $100 in order to remain competitive in the market. Recalculate profit margins for both packages at these price levels.
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