Each year, a large clothing store in New York City sends its top five salespersons on a five-day retreat in Orlando, Florida. The retreat begins on the first Monday in February and ends the following Friday afternoon. The company must purchase five coach-class airline tickets from New York City to Orlando, Florida. The total budgeted airfare for the trip is $1,400 for five tickets. As the assistant in charge of purchasing the tickets, visit the following Web address:
www.travelocity.com
Find the lowest fare between the two airlines for a round-trip flight leaving the first Monday morning in February and returning Friday evening.
Instructions
a. On the basis of the lowest fare, calculate the total spending variance related to the ticket purchase. Is it favorable or unfavorable?
b. Does the standard seem reasonable given current ticket prices? What factors might determine whether the price variance is favorable or unfavorable?