a. "Item 6. Selected Financial Data" lists data for several measures of activity. List the items from this table that might be used by Southwest as an activity base for CVP analysis.

b. Of the activity bases that you identified for Requirement a, which do you think would work best for performing CVP at Southwest? Explain the rationale for your choice.

c. Use the "Operating expense" and the "Revenue passenger miles" data from Item 6 to compute the variable cost and fixed cost components of operating expense using the high-low method presented in ? Chapter 2. Carry the variable cost per passenger mile o to four decimal places.

d. "Item 6" reports that in 2019 Southwest's "Load factor" was 83.5 percent. If this load factor could have been increased by 10 percent to 91.8 percent, do you think the company's net earnings would have increased by less than 10 percent, 10 percent, or more than 10 percent? Explain.

2019 2018 2017 2016 2015 Financial Data (in millions, except per share amounts): Operating revenues 22,428 S 21,965 21,146 S 20,289 19,820 Operating expenses 19.471 18,759 17,73 16,76 15,821 Operating income 2.957 3,206 3,407 3,522 3,999 Other expenses (income) net 42 142 72 520 Income before taxes 2,957 3,164 3,265 3,450 3,479 Provision (benefit) for income taxes 657 699 (92) 1,267 1,298 Net income 2,300 2.465 3,357 2,183 2,181 Net income per share, basic 4.28 4.30 5.58 S 3.48 3.30 Net income per share, diluted 4.27 4.29 5.57 S 3.45 S 3.27 Cash dividends per common share 0.70 0.60 0.47 0.375 0.285 Total assets at period-end 25,895 26,243 $ 25,110 S 23,286 21,312 Long-term obligations at period-end 1,846 2,771 3,320 2,821 2,541 Stockholders' equity at period-end 9,832 9,853 9,641 7,784 7,358 Operating Data: Revenue passengers carried (000s) 134,056 134,890 130,256 124,720 118,171 Enplaned passengers (000s) 162,681 163,606 157,677 151,740 144,57 Revenue passenger miles (RPMs) (in millions)(2) 131,345 133,322 T 129,041 124,798 117,50 Available seat miles (ASMs) (in millions)(6) 157 254 150 705 152 011 140 527 140 501 Revenue passenger miles (RPMs) (in millions)(2) 131,345 133,322 129,041 124,798 117,500 Available seat miles (ASMs) (in millions)( 157,254 159,795 153,811 148,522 140,501 Load factor() 83.5% 83.4% 83.9% 84.0% 83.6% Average length of passenger haul (miles) 980 988 991 1,001 994 Average aircraft stage length (miles) 748 757 754 760 750 Trips flown 1,367,727 1,375,030 1,347,893 1,311,149 1,267,358 Seats flown (000s)() 206,390 207,223 200,879 193,168 184,955 Seats per trip() 150.9 150.7 149.0 147.3 145.9 Average passenger fare S 154.98 S 151.64 S 151.73 S 152.89 S 154.85 assenger revenue yield per RPM (cents)() 15.82 15.34 15.32 15.28 15.5 perating revenues per ASM (cents)(20) 14.26 13.75 13.75 13.66 13.98 assenger revenue per ASM (cents)(h) 13.21 12.80 12.85 12.84 13.02 perating expenses per ASM (cents)() 12.38 11.74 11.53 11.29 11.26 Operating expenses per ASM, excluding fuel (cents) 9.62 8.85 8.88 8.73 8.60 Operating expenses per ASM, excluding fuel and profitsharing (cents) 9.19 8.51 8.53 8.34 8.16 fuel costs per gallon, including fuel tax 2.09 S 2.20 1.99 1.90 S 1.96 uel costs per gallon, including fuel tax, economic 2.09 2.20 2.06 2.00 2.13 Fuel consumed, in gallons (millions) 2,07 2.094 2,045 1.996 1,901 Active fulltime equivalent Employees 60,76 58,803 56.110 53.536 49,58 Aircraft at end of period 747 750 706 723