MidCoast Airlines provides charter airplane services. In October, when the company is operating at \(60 \%\) of its capacity, it receives a bid from the local college. The college is organizing a trip for a student group. The college budgeted only \(\$ 30,000\) for round-trip airfare. MidCoast Airlines normally charges between \(\$ 50,000\) and \(\$ 60,000\) for such service. MidCoast determines its total cost for the round-trip flight to Washington to be \(\$ 45,000\), which consists of the following.

Although the manager at MidCoast supports the college's educational efforts, she is struggling to justify accepting only \(\$ 30,000\). 

(a) What is the contribution margin from accepting the offer? 

(b) Should the airline accept the \(\$ 30,000\) offer from the college?

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Variable cost.... Fixed cost..... Total cost...... $25,000 20,000 $45,000