Question
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 Comfis base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent months activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $64,000 Variable costs Fuel $23,760 Snacks and drinks 800 Landing fees 2,400 Supplies and forms 1,200 28,160 Contribution margin 35,840 Fixed costs Depreciation 3,000 Salaries 13,666 Advertising 400 Airport hanger fees 1,750 18,816 Net income $17,024 Correct answer. Your answer is correct. Calculate the break-even point in dollars. Break-even point $Entry field with correct answer LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Calculate the break-even point in number of passenger flights. Break-even point Entry field with incorrect answer flights LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Without calculations, determine the contribution margin at the break-even point. Break-even point $Entry field with incorrect answer LINK TO TEXT Partially correct answer. Your answer is partially correct. Try again. 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 Entry field with correct answer to $Entry field with incorrect answer (2) Should the ticket price decrease be adopted?
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