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Northwest Wings Fishing Expeditions provides charter air service from Seattle Washington to remote fishing villages in southern Alaska. The CFO is working on the budget
Northwest Wings Fishing Expeditions provides charter air service from Seattle Washington to remote fishing villages in southern Alaska. The CFO is working on the budget for February 2020 and uses same period comparables to complete the analysis. Average ticket price per passenger each way (passenger- segment) is $355. The airline has one 15 passenger aircraft and is capable of 40 flight-segments per month. Actual results from February 2020 are provided below. Northwest Wings Fishing Expeditions Contribution Analysis - February 2020 Total $ PPS % Revenue $ 168,980 S 355 100.0% Variable Costs s 40,460 $ 85 22.9% Contribution Margin $ 128,520 S 270 76.1% Faed Costs $ 100.000 Operating Income before Tax $ 28.520 Income Taxes s 5.999 Net Income After Tax $ 22.531 Average ticket price per passenger segment S 355 Average variable cost per passenger segment S SS Fixed cost per month 100 000 Tax rate 2153 Number of segments 476 Passenger-segment capacity 600 Actual use of operating capacity 7995 Each question below is independent. Round passenger-segments to whole values. Be sure to document your work and label your final answer. 1. How many passenger-segments are needed for Northwest Wings to achieve breakeven? (Basic CVP analysis)
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