Question
Fare revenues (400 passenger flights)$48,000Variable costs Fuel$14,000 Snacks and drinks800 Landing fees2,000 Supplies and forms1,20018,000Contribution margin30,000Fixed costs Depreciation3,000 Salaries15,000 Advertising500 Airport hanger fees1,75020,250Net income$9,750 If
Fare revenues (400 passenger flights)$48,000Variable costs Fuel$14,000 Snacks and drinks800 Landing fees2,000 Supplies and forms1,20018,000Contribution margin30,000Fixed costs Depreciation3,000 Salaries15,000 Advertising500 Airport hanger fees1,75020,250Net income$9,750
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?
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Business Information Systems For Accounting Students
Authors: Martin Quinn
1st Edition
0273773526, 9780273773528
