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1. Examine the costs listed on the financial statements for the airline company of your choice and identify the fixed costs and variable costs


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1. Examine the costs listed on the financial statements for the airline company of your choice and identify the fixed costs and variable costs 2. Using the fixed and variable costs, calculate (make an estimate) and explain the following: total fixed costs, fixed cost per unit, total variable costs, variable cost per unit, total costs, and average unit cost. 3. Explain how costs (total and per unit) behave with changes in demand. 4. Based upon your calculations (best estimates) of fixed and variable costs from the previous questions, estimate how the total cost of the company varies with the number of passengers 5. Calculate: Before a flight is scheduled, what are the variable and fixed costs? 6. Calculate: Before a flight is scheduled, what are the direct and indirect costs? 7. Calculate: Once a flight is scheduled, what are the variable and fixed costs? 8. Calculate: Once a flight is scheduled, what are the direct and indirect costs? 9. How is knowledge of variable and fixed costs useful? How is knowledge of direct and indirect costs useful? 10. Why are profits more sensitive to changes in demand when the cost structure contains a high proportion of fixed costs?

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