Exercise $19-19($Algo$)$ Analyzing a special offer for a service company LO P$3$ Exercise $19-19($Algo$)$ Analyzing a special offer for a service company LO P$3$

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 $$32,000$ for round$-$trip airfare. MidCoast Airlines normally charges

between $$52,000$ and $$62,000$ for such service. MidCoast determines its total cost for the round$-$trip

flight to Washington to be $$47,200,$ which consists of the following.

Although the manager at MidCoast supports the college's educational efforts, she is struggling to justify

accepting only $$32,000.$

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

$($b$)$ Should the airline accept the $$32,000$ offer from the college?

Complete this question by entering your answers in the tabs below.

Should the airline accept the $$32,000$ offer from the college?

Should the airline accept the $$32,000$ offer from the college?

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 $$32,000$ for round$-$trip airfare. MidCoast Airlines normally charges

between $$52,000$ and $$62,000$ for such service. MidCoast determines its total cost for the round$-$trip

flight to Washington to be $$47,200,$ which consists of the following.

Although the manager at MidCoast supports the college's educational efforts, she is struggling to justify

accepting only $$32,000.$

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

$($b$)$ Should the airline accept the $$32,000$ offer from the college?

Complete this question by entering your answers in the tabs below.

What is the contribution margin from accepting the offer?