Analyze Pacific Airways

Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows:

a$.$ Determine the contribution margin per passenger for the full$-$priced ticket.

b$.$ Determine the break$-$even number of seats sold per flight.

$ seats

c$.$ Determine the contribution margin per passenger for discounted tickets.

$

a$.$ The contribution margin has no relevance to new plan implementation.

b$.$ The new contribution margin is more than the older margin. It shows a positive flow of funds into the business.

c$.$ The differences are very meager and it is not effective to implement the plan.

d$.$ The contribution margin before implementing the plan can be relied as it in the practice.

:

d$-2.$ The contribution margin of the company represents:

a$.$ The ability of the product to meet its variable costs.

b$.$ The amount adjusted against the variable costs.

c$.$ The remaining revenue after adjusting the variable costs incurred due to selling additional products.

d$.$ The profit earned in the activity.