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Blossom Airways Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. The planes seat 10 passengers
Blossom Airways Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. The planes seat 10 passengers each, and they fly commuters from Blossom's base airport to the major city in the province, 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.
Fare revenues (400 fares) | $49,200 | ||||
Variable costs | |||||
Fuel | $20,900 | ||||
Snacks and drinks | 1,200 | ||||
Landing fees | 1,500 | ||||
Supplies and forms | 1,000 | 24,600 | |||
Contribution margin | 24,600 | ||||
Fixed costs | |||||
Depreciation | 2,500 | ||||
Salaries | 12,450 | ||||
Advertising | 2,000 | ||||
Airport hangar fees | 1,500 | 18,450 | |||
Operating income | $6,150 |
Without calculations, determine the contribution margin at the break-even point.
Contribution margin at the break-even point | $ |
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