I am working on a case study called TransGlobal Airlines. I need to find the breakeven per passenger for regional flight SOF $-$ PLE. I have attached the income statement for that region as well as the necessary charts needed to help allocate. Right now, their average passenger per flight is $12$ and it needs to be in the high teens to $23.$ I also need to find the breakeven ticket price. For fixed costs we only need to allocate Aircraft Depreciation, Pilot Crew, Cabin Crew, Gate Rental, & Ground Staff. The current price for a ticket is Kr $49.$ b$.$ Breakeven volume of passengers for the SOF to PLE route.

i$.$ Compute breakeven passenger volume, both in terms of passengers per one way flight and the annual number of passengers, on the SOF$-$PLE route

$1.$ What is the cost object?

$2.$ Which costs are fixed and which are variable for the cost object?

$3.$ How do you decide what portion of total fixed costs are attributable to the SOF to PLE route? Show your calculations.

ii$.$ Compute the current average number of passengers per one way flight on SOF to PLE, and compare that to the results of your breakeven computations

iii. Using the current number of passengers per one way flight computed in part $($ii$)$ above, compute the ticket price needed to break even.

iv$.$ Compute breakeven passenger volume on SOF$-$PLE again. This time, use an alternative method or assumptions about cost$/$operational structure when deciding how fixed costs get allocated to the SOF$-$PLE flight. In other words, recompute your results using alternative allocation bases. $\backslash$begin$\{$tabular$\}\{|$l$|$r$|$r$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$ INCOME STATEMENT for REGIONAL $\}\backslash \backslash$

$\backslash$hline & & $\backslash \backslash$

$\backslash$hline Revenues & & $19\mathrm{.}3\backslash \backslash$

$\backslash$hline Aircraft Costs & & $\backslash \backslash$

$\backslash$hline Fuel & $18\mathrm{.}2$ & $\backslash \backslash$

$\backslash$hline Aircraft Depreciation & $1\mathrm{.}9$ & $\backslash \backslash$

$\backslash$hline Flight Personnel Costs & & $\backslash \backslash$

$\backslash$hline Pilot Crew & $4\mathrm{.}2$ & $\backslash \backslash$

$\backslash$hline Cabin Crew & $0\mathrm{.}9$ & $\backslash \backslash$

$\backslash$hline Ground Costs & & $\backslash \backslash$

$\backslash$hline Gate Rental & $0\mathrm{.}7$ & $\backslash \backslash$

$\backslash$hline Ground Staff & $2\mathrm{.}1$ & $\backslash \backslash$

$\backslash$hline NET LOSS & & $\backslash (\backslash$mathbf$\{-8.7\}\backslash )\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Table $1$: TransGlobal Airlines

Daily Flight Schedule

ALL FLIGHTS OPERATE $365$ DAYS PER YEAR

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline HOME CITY & DESTINATION & ONE$-$WAY DISTANCE $($MILES$)$ & MARKET SEGMENT$*$ & EQUIPMENT$**$ & $```$

ROUND$-$TRIP

FLIGHTS

PER DAY

$```$ & $\backslash$begin$\{$tabular$\}\{$l$\}$

ANNUAL $\backslash \backslash$

PASSENGER$-\backslash \backslash$

MILES$-$FLOWN $\backslash \backslash$

$($MILLIONS$)$

$\backslash$end$\{$tabular$\}\backslash \backslash$

$\backslash$hline $\backslash$multirow$[$t$]\{15\}\{*\}\{$SOF$\}$ & CDG & $2,800$ & I & JJ & $1$ & $480\mathrm{.}3\backslash \backslash$

$\backslash$hline & FRA & $2,500$ & I & JJ & $1$ & $465\mathrm{.}3\backslash \backslash$

$\backslash$hline & IST & $1,800$ & I & JJ & $1$ & $329\mathrm{.}8\backslash \backslash$

$\backslash$hline & LHR & $3,200$ & I & JJ & $1$ & $630\mathrm{.}7\backslash \backslash$

$\backslash$hline & ROM & $1,200$ & I & J J & $1$ & $223\mathrm{.}3\backslash \backslash$

$\backslash$hline & WIN & $3,500$ & I & JJ & $1$ & $608\mathrm{.}1\backslash \backslash$

$\backslash$hline & BUR & $280$ & C & MJ & $2$ & $32\mathrm{.}7\backslash \backslash$

$\backslash$hline & PLO & $240$ & C & MJ & $6$ & $98\mathrm{.}9\backslash \backslash$

$\backslash$hline & RUS & $270$ & C & MJ & $2$ & $32\mathrm{.}7\backslash \backslash$

$\backslash$hline & VAR & $260$ & C & MJ & $6$ & $103\mathrm{.}7\backslash \backslash$

$\backslash$hline & BLA & $125$ & R & TP & $4$ & $7\mathrm{.}7\backslash \backslash$

$\backslash$hline & LOV & $160$ & R & TP & $3$ & $6\mathrm{.}3\backslash \backslash$

$\backslash$hline & PLE & $170$ & R & TP & $2$ & $4\mathrm{.}2\backslash \backslash$

$\backslash$hline & VLD & $140$ & R & TP & $2$ & $2\mathrm{.}2\backslash \backslash$

$\backslash$hline & VTA & $130$ & R & TP & $6$ & $3\mathrm{.}9\backslash \backslash$

$\backslash$hline $\backslash$multirow$[$t$]\{7\}\{*\}\{$PLO$\}$ & VAR & $225$ & C & MJ & $4$ & $60\mathrm{.}5\backslash \backslash$

$\backslash$hline & GAB & $180$ & R & TP & $2$ & $2\mathrm{.}1\backslash \backslash$

$\backslash$hline & JAM & $170$ & R & TP & $2$ & $2\mathrm{.}2\backslash \backslash$

$\backslash$hline & KAR & $200$ & R & TP & $3$ & $8\mathrm{.}8\backslash \backslash$

$\backslash$hline & MAS & $130$ & R & TP & $3$ & $4\mathrm{.}6\backslash \backslash$

$\backslash$hline & SLI & $170$ & R & TP & $4$ & $3\mathrm{.}9\backslash \backslash$

$\backslash$hline & TAR & $120$ & R & TP & $2$ & $1\mathrm{.}2\backslash \backslash$

$\backslash$hline $\backslash$multirow$[$t$]\{5\}\{*\}\{$VAR$\}$ & NES & $190$ & R & TP & $4$ & $6\mathrm{.}7\backslash \backslash$

$\backslash$hline & SIL & $125$ & R & TP & $2$ & $1\mathrm{.}6\backslash \backslash$

$\backslash$hline & SUM & $120$ & R & TP & $4$ & $2\mathrm{.}5\backslash \backslash$

$\backslash$hline & TOL & $135$ & R & TP & $2$ & $1\mathrm{.}2\backslash \backslash$

$\backslash$hline & & & & & & $3,125\mathrm{.}1\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

$*\backslash (\backslash$mathrm$\{$I$\}=\backslash )$ International, C$=$Large City, R$=$Regional City $**$ JJ$=$Jumbo Jet, MJ$=$Medium Jet, TP$=$Turboprop Table $3$: TransGlobal Airlines

Summary of Selected Cost and Operating Data

A crew flies one one$-$way intermational flight per day. Crews for the large$-$city routes fly one round$-$trip flight per day. The regional crews fly three round trips per day. But crews dan't work every day, so there needs to be an allowance for holidass, sickness, and so an$.$ Thus the firm hives an equivalent of twice the number of crews needed per day. Table $3$: TransGlobal Airlines

Summary of Selected Cost and Operating Data

Continued from previous page

Cabin crews put in the same amount of flight time as pilots.

Gates are dedicated to each type of aircraft. Thus there is no shaning of gates among the three market segments. There is one large$-$city gate at BUR, PIO, and RUS, and there are two large$-$city gates at VAR. Each regional city has one gate. There are three regional$-$city gates at PLO and two at VAR

An informal time study shows that the staff at the primary hub spend $\backslash (30\backslash \%\backslash )$ of their time servicing international fights, $\backslash (40\backslash \%\backslash )$ on domestic large$-$city flights, and $\backslash (30\backslash \%\backslash )$ on regional fights. The staff at PLO spend $\backslash (40\backslash \%\backslash )$ of their time devoted to large$-$city fights and $\backslash (60\backslash \%\backslash )$ to regionalcrity flights. The staff at VAR spend $50\backslash \%$ of their time on large$-$city flights and $\backslash (50\backslash \%\backslash )$ an regional flights.