Question

Divya is a tour manager of XYZ travel company ,she wants to take help in preparation of tour costing from some other tour operating company but as we all know that the method of calculating the cost largely vary from one tour operating company to other so how will she do tour costing?

Answer 1

• Divya must know that Tour cost is represented as the total cost incurred or attributed to various elements of package tour. 
• The sum of cost for booking these services is incurred to designed the FITand GIT tour package.
• The cost of package tour is determine by the tastes and preferences of customers and the business strategy to increase the sale of more tour packages.
• Divya can easily find the variable and fixed cost and take appropriate decisions. The method of calculating the costs largely vary from one tour operating company to other depending on their core competency and company's business strategy. 
• Break - even analysis is one of the key concept of tour costing.
• It is the total revenue generated from the sale of package tour and it must be equal to the total cost incurred for acquiring the services.
• This technique is used to evaluate alternative pricing labels does brake even sales can be obtained by dividing the sum of the total fixed cost and the total variable costs by the package prices.