Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comh 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

image text in transcribed
image text in transcribed
Comh 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 $48,000 $16,960 720 2,100 1,100 Fare revenues (400 passenger flights) Variable costs Fuel Snacks and drinks Landing fees Supplies and forms Contribution margin Fixed costs Depreciation Salaries Advertising Airport hanger fees Net income 20,880 27,120 3,100 11,600 600 1,650 16,950 $10,170 (21) Calculate the break-even point in dollars. Break-even point (a2) Calculate the break-even point in number of passenger flights. Break-even point flights (b) Without calculations, determine the contribution margin at the break-even point. Break-even point (c) 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions