aircraft that it open 11-30 Contribution approach, relevant costs. Air Frisco has leased a single jet aircraft that it between San Francisco and the Fijian Islands. Only tourist-class seats are available on its planes lyst has collected the following information: Seating capacity per plane 360 passengers Average number of passengers per flight 200 passengers Average one-way fare $500 Variable fuel costs $14,000 per flight Food and beverage service costs $20 per passenger Ino charge to passenger) Commission to travel agents paid by Air Frisco 8% of fare (all tickets are booked by travel agents) Fixed annual lease costs allocated to each flight $53,000 per flight Fixed ground-services (maintenance, check in, baggage handling) costs allocated to each flight $7,000 per flight Fixed flight-crew salaries allocated to each flight $4,000 per flight Assume that fuel costs are unaffected by the actual number of passengers on a flight. 1. Calculate the total contribution margin from passengers that Air Frisco earns on each one-way high between San Francisco and Fiji. 2 The Market Research Department of Air Frisco indicates that lowering the average one-way $480 will increase the average number of passengers per flight to 212. On the basis of financial con siderations alone, should Air Frisco lower its fare? Show your calculations. 3. Travel International, a tour operator, approaches Air Frisco with the possibility of chartering itsura The terms of charter are as follows: (a) For each one-way flight, Travel International will pay Arn $74,500 to charter the plane and to use its flight crew and ground-service staff: (b) Travel Inter will pay for fuel costs; and (c) Travel International will pay for all food costs. On the basis of finance siderations alone, should Air Frisco accept Travel International's offer? Show your calculation other factors should Air Frisco consider in deciding whether to charter its plane to Travel Intern Required calculations "val International