Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Accounting Help. Thanks! I don't know what I'm doing wrong, please help me find the correct answers for everything marked wrong Exercise 6-4 * Your

Accounting Help. Thanks!

I don't know what I'm doing wrong, please help me find the correct answers for everything marked wrong

image text in transcribed

image text in transcribed

Exercise 6-4 * Your answer is incorrect. Try again. Comfi 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 Comfi's base airport to the major city in the state, Metropolis. Each month 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $45,600 $16,054 790 2,090 1,130 Fare revenues (400 fares) Variable costs Fuel Snacks and drinks Landing fees Supplies and forms Contribution margin Fixed costs Depreciation Salaries Advertising Airport hanger fees Net income 20,064 25,536 2,990 13,950 300 1,800 19,040 $6,496 (a) Calculate the break-even point in (1) dollars and (2) number of fares. (Round answers to 0 decimal place, e.g. 1,225.) 1. Break-even point 11,600 2. Break-even point 102 fares (b) Without calculations, determine the contribution margin at the break-even point. Break-even point 25,536 (c) If fares were decreased by 10%, an additional 100 fares could be generated. However, total variable costs would increase by 20%. (Round answers to 0 decimal place, e.g. 1,225.) (1) How much would net income be impacted by this change? Net income decreases ). U 6,384 (2) Should the fare decrease be adopted? dopted? TI No 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Beginners

Authors: Kokab Rahman

1st Edition

149479294X, 978-1494792947

More Books

Students also viewed these Accounting questions

Question

What is a (a) dichotomous variable? (b) binary variable?

Answered: 1 week ago