TOUR AGENCY

Tour Agency

Tour Agency

Introduction

The study is related to Sephats Tours which is a London based tour agency. The company provides group and individual to the clients. The services by Sephats initially include pre-arranged tours, custom packages based on the specifications of the clients, consultation about travelling etc. The tour agency intends to differentiate its business with other premier players in the market by offering three tours with in UK. These tours will be offered to tourist visiting London before, during and after the Olympics.

This tour programs will be advantage for the tour agency as during the London Olympics, large numbers of tourists are expected which will be target audience for the tour agency.

Discussion

The selling price for each of the company's tours will be:

London based

A day trip from London

Evening tours

(Jack the Ripper coach and walking tour)

Price

£ 23

£ 26

£ 29

Per Unit Cost Statement

London based

A day trip from London

Evening tours

(Jack the Ripper coach and walking tour)

Salary of Employees

£ 4000

£ 4000

£ 4000

CNG/ Diesel

£ 2500

£ 2300

£ 2000

Bus Maintenance

£ 2000

£ 2000

£ 2000

Total Cost

£ 8500

£ 8300

£ 8000

Total Tourists

£ 600

£ 600

£ 600

Per Unit Cost

£ 14

£ 14

£ 13

Monthly Cash Budget Month 1 Month 2 Month 3 Month 4 Beginning cash balance £ - £ 24,500 £ 48,575 £ 72,204 Cash from operations £ 33,000 £ 33,000 £ 33,000 £ 33,000 Total Available Cash £ 33,000 £ 57,500 £ 81,575 £ 105,204 Less: Salary of Employees £ 4,000 £ 4,200 £ 4,410 £ 4,631 CNG/Diesel £ 2,500 £ 2,625 £ 2,756 £ 2,894 Bus Maintenance £ 2,000 £ 2,100 £ 2,205 £ 2,315 Total Disbursements £ 8,500 £ 8,925 £ 9,371 £ 9,840 Ending Cash Balance £ 24,500 £ 48,575 £ 72,204 £ 95,364

Break-even and Target Profit for A day trip from London:

Sale of tickets = Variable expenses + Fixed expenses + Profit

Where n = number of Tourists

600 n = 2500 n + 6000 + 0

600 n - 2500 n = 6000

1900n = 6000

n = 6000/ 1900

n = 3.15

n = 3

Target Profit = ((2500x 20) + 6000) - (600x 20)

Target Profit = (50000 + 6000) - 12000

Target Profit = 56000- 12000

Target Profit = £ 44000

Break-even and Target Profit for London based Tour:

Sale of tickets = Variable expenses + Fixed expenses + Profit

Where n = number of Tourists

600 n = 2300 n + 6000+ 0

600 n - 2300 n = 6000

1700 n = 6000

n = 6000/ 1700

n = 3.52

n = 4

Target Profit = ((2300x 20) + 6000)- (600x 20)

Target Profit = (46000 + 6000) - 12000

Target Profit = 52000 - 12000

Target Profit = £ 40000

Break-even and Target Profit for Evening tours (Jack the Ripper coach and walking tour):

Sale of tickets = Variable expenses + Fixed expenses + Profit

Where n = number of Tourists

600 n = 2000 n + 6000+ 0

600 n - 2000 n = 6000

1400 n = 6000

n = 6000/ 1400

n = 4.28

n = 4

Target Profit = ((2000 *20) + 6000) - (600x 20)

Target Profit = (40000 + 6000) - 12000

Target Profit = 46000 - 12000

Target Profit = £ 34000

Environmental ...