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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
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. Fare revenues (400 passenger flights) $48,000 Variable costs $15,040 Fuel Snacks and drinks 680 Landing fees 2,000 Supplies and forms 1,000 18,720 Contribution margin 29,280 Fixed costs Depreciation 2,950 Salaries 14,514 Advertising 500 1,800 Airport hanger fees 19,764 $9,516 Net income Calculate the break-even point in dollars Break-even point Calculate the break-even point in number of passenger flights Break-even point flights LINK TO TEXT Without calculations, determine the contribution margin at the break-even point. Break-even point LINK TO TEXT If ticket prices were decreased by 10 % , passenger flights would increase by 25%. However , total variable costs would increase by the same percentage as passenger flights (1) How much would net income be impacted by this change? Net income to $ (2) Should the ticket price decrease be adopted
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