# What are the types of cost in tour costing?

Contents

## What is a tour cost?

The cost for developing a package tour decides the final price of the package. The sale of the package tour is a direct function of direct or indirect costs or. fixed and variable costs. The tour cost is explained as the sum total of cost. incurred to combine related and complementary services.

## What is variable cost of tour?

Variable costs

This refers to the costs you incur according to the number of tours or activities you run. It includes wages for your guides, cost of fuel, meals during your tours or a commission you pay your re-sellers.

## What are the types of tour operators?

Types of Tour Operators

• Inbound Tour Operators.
• Outbound Tour Operators.
• Domestic Tour Operators.
• Ground Operators.

## How are tour costs calculated?

Calculation of Tour Cost

To find out the per person cost of the tour you have to divide the total tour cost by the total number of people travelling for the tour. So here, Rs. 22706 if divided by 14 people (12 students and 2 faculty), the per person cost comes to Rs.

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## What are three factors in determining how a tour is priced?

Traditional components for determining proper pricing are costs, market demand, and competition. Each component must be compared with your company’s objective in entering the foreign market.

## What are the advantages of tour cost sheet?

The main advantages of a cost sheet are:

(i) It indicates the break-up of the total cost by elements, i.e. material, labour, overheads, etc. (ii) It discloses the total cost and cost per unit of the units produced. (iii) It facilitates comparison.

## What are the factors that influence Tour costing?

However, the purchase price of a travel product is based on three factors: Cost, competition, and demand. Every tour package sold by a vendor has a quantifiable cost. To produce profit the price paid by the tourists must be greater than the agency’s cost.

## How do tour operators make money?

Generally, leisure travel agencies’ main revenue is from commissions vendors pay on vacation packages, cruises, air and other add-ons. However, consultation fees and service fees are becoming more common as agencies try to diversify income sources to become less dependent on supplier commissions.

## What is an example of a tour operator?

A tour operator does not always sell flights, they can also be purely ground-based. Cycling holidays, yoga retreats, wellness holidays, detox retreats, skiing holidays, hiking breaks, theatre breaks, cookery escapes are all examples of tour operators.

## What are the various components of tour package?

The components of such tours are air travel, air transfer, accommodation, travel documents, sightseeing, boat riding, entertainment, and other travel services. However, in some cases, the tourists are free to purchase every single component separately.

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## How do you prepare a cost sheet?

Method of Preparation of Cost Sheet:

Step I = Prime Cost = Direct Material + Direct Labour + Direct Expenses. ADVERTISEMENTS: Step II = Works Cost = Prime Cost + Factory/Indirect Expenses. Step III = Cost of Production = Works Cost + Office and Administration Expenses.