Answer
If fixed costs increase by \$19,000, the new breakeven point in hours is the same as calculated in (1).
To maintain this breakeven point, the variable cost per person must decrease by the amount of the increase in fixed costs:
Decrease in Variable Cost per Person = Increase in Fixed Costs $\div$ Breakeven Point
Decrease in Variable Cost per Person = \$19,000 / 200 tours
Decrease in Variable Cost per Person = \$95 per person
Work Step by Step
If fixed costs increase by \$19,000, the new breakeven point in hours is the same as calculated in (1).
To maintain this breakeven point, the variable cost per person must decrease by the amount of the increase in fixed costs:
Decrease in Variable Cost per Person = Increase in Fixed Costs $\div$ Breakeven Point
Decrease in Variable Cost per Person = \$19,000 / 200 tours
Decrease in Variable Cost per Person = \$95 per person
