Question: Frightproof Commuter Airlines is considering adding a new flight to its current schedule from Metro to Hicksville. This route has the following prices and costs:
Frightproof Commuter Airlines is considering adding a new flight to its current schedule from Metro to Hicksville. This route has the following prices and costs:
| Selling price per passenger per flight | $ | 240 | |
| Variable cost per passenger per flight | $ | 60 | |
| Fixed cost per flight | $ | 8,640 | |
| Income tax rate | 25 | % | |
a. Compute Frightproof's break-even point in number of passengers per flight.
b. How many passengers per flight must Frightproof have to earn $3,510 per flight after taxes?
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