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) $56,000 Variable costs Fuel $18,640 Snacks and drinks 720 Landing fees 2,000 Supplies and forms 1,600 22,960 Contribution margin 33,040 Fixed costs Depreciation 2,950 Salaries 13,022 Advertising 600 Airport hanger fees 1,600 18,172 Net income $14,868 Calculate the break-even point in dollars. Break-even point $ Calculate the break-even point in number of passenger flights. Break-even point flights Without calculations, determine the contribution margin at the break-even point. Break-even point $ 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?