Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic...
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Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger fights) $48,000 Variable costs Fuel $17,354 Snacks and drinks 760 Landing fees 2,100 Supplies and forms 1,050 21,264 Contribution margin 26,736 Fixed costs Depreciation 2,900 Salaries 14,595 Advertising 400 Airport hanger fees 1,600 19,495 Net income $7,241 Calculate the break-even point in dollars. Break-even point 24 Calculate the break-even point in dollars. Break-even point Calculate the break-even point in number of passenger flights. Break-even point flights Without calculations, determine the contribution margin at the break-even point. Break-even point If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger flights. (1) How much would net income be impacted by this change? Net income to $ (2) Should the ticket price decrease be adopted? Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger fights) $48,000 Variable costs Fuel $17,354 Snacks and drinks 760 Landing fees 2,100 Supplies and forms 1,050 21,264 Contribution margin 26,736 Fixed costs Depreciation 2,900 Salaries 14,595 Advertising 400 Airport hanger fees 1,600 19,495 Net income $7,241 Calculate the break-even point in dollars. Break-even point 24 Calculate the break-even point in dollars. Break-even point Calculate the break-even point in number of passenger flights. Break-even point flights Without calculations, determine the contribution margin at the break-even point. Break-even point If ticket prices were decreased by 10%, passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passenger flights. (1) How much would net income be impacted by this change? Net income to $ (2) Should the ticket price decrease be adopted?
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Yes ticket price decrease can be adopted Ans 400 Passenger flights Particulars Amount ... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-1119392132
3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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