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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
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 Comf'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 Fuel $ 16,714 Snacks and drinks 730 Landing fees 2,000 Supplies and forms 1.100 20,544 27,456 Contribution margin Fixed costs Depreciation 3.000 Salaries 12,632 500 Advertising Airport hanger fees 1,600 17,732 $9.724 Net income -11 Calculate the break-even point in dollars. Break-even point $ e Textbook and Media Calculate the break-even point in number of passenger flights. Break-even point flights e Textbook and Media Without calculations, determine the contribution margin at the break-even point. Break-even point $ India 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? e Textbook and Media
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