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.1. Calculate the break-even point in dollars.

2. Calculate the break-even point in number of passenger flights.

3. Without calculations, determine the contribution margin at the break-even point.

4. 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. How much would net income be impacted by this change?

Net Income increases to $_____?

Fare revenues (400 passenger flights) $48,000 Variable costs Fuel $17,354 Snacks and drinks 760 Landing fees Supplies and forms 2,100 1,050 21,264 26,736 Contribution margin Fixed costs Depreciation 2,900 Salaries 14,595 400 Advertising Airport hanger fees 1,600 19,495 $7,241 Net income