Ina recent year, National Air Lines, Inc., filled 50 percent of the available seats on its flights,
Question:
Ina recent year, National Air Lines, Inc., filled 50 percent of the available seats on its flights, a record about 15 percentage points below the national average.
When you answer this question, suppose that National had a basic package of 3,000 flights per month that had an average of 100 seats available per flight.
Also suppose that 52 percent of the seats were filled at an average ticket price of
$200 per flight. Variable costs are about 70 percent of revenue.
National also had a marginal package of 120 flights per month that had an average of 100 seats available per flight. Suppose that only 20 percent of the seats were filled at an average ticket price of $100 per flight. Variable costs are about 50 percent of this revenue. Prepare a tabulation of the basic package, marginal package, and total package, showing percentage of seats filled, revenue, variable expenses, and contribution margin.
Step by Step Answer:
Management Accounting
ISBN: 9780367506896
5th Canadian Edition
Authors: Charles T Horngren, Gary L Sundem, William O Stratton, Howard D Teall, George Gekas