If ticket prices were decreased by 10%. passenger flights would increase by 25%. However, total variable...

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If ticket prices were decreased by 10%. passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passerger flights (1) How much would net income be impacted by this change? Net income : to s (2) Should the ticket price decrease be adopted? Sheridan 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 Sheridan's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. $44,160 Fare revenues (400 passenger flights) Variable costs Fuel $12,880 736 Snacks and drinks Landing fees 1,840 1,104 16,560 Supplies and forms Contribution margin 27,600 Fixed costs 2,760 Depreciation Salaries 13,800 Advertising 460 Airport hanger fees 1,610 18,630 Net income $8,970 If ticket prices were decreased by 10%. passenger flights would increase by 25%. However, total variable costs would increase by the same percentage as passerger flights (1) How much would net income be impacted by this change? Net income : to s (2) Should the ticket price decrease be adopted? Sheridan 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 Sheridan's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. $44,160 Fare revenues (400 passenger flights) Variable costs Fuel $12,880 736 Snacks and drinks Landing fees 1,840 1,104 16,560 Supplies and forms Contribution margin 27,600 Fixed costs 2,760 Depreciation Salaries 13,800 Advertising 460 Airport hanger fees 1,610 18,630 Net income $8,970

Answer rating: 100% (QA)

Requirement 1 Unit ticket price 44160 400 11040 New ticket price 11040 x 90 9936 New number of ... View the full answer