Go to the Web site for Delta Air Lines, which is linked to the text Web site at www.cengage.com/accounting/vanderbeck. Click on ‘‘Specials,’’ then ‘‘Web Fares’’ and do the following:
1. Find a fare departing from a city located closest to you with a destination furthest from you. What is the amount of this round-trip fare for the upcoming weekend? (Note that the fares usually are not posted until Wednesday of the week of travel.)
2. Now find the best fare for the same itinerary departing two weeks from now, with a Saturday night stay. How much is the difference between the two fares?
3. Do you think that Delta is generating any positive contribution margin on the weekend Web fare, or is it merely creating good customer relations?
4. Are most of Delta’s costs variable or fixed in relation to an individual passenger? Give some examples of each.
5. If the cost object were a specific flight rather than an individual passenger, what would be some examples of variable costs?