P13-34 (book/static) Question Help Costal Airways is about to introduce a daily round-trip flight from New York to Los Angeles and is determining how to price its round-trip tickets. The market research group at Costal Ainvays segments the market into business and pleasure travelers. It provides the following information on the effects of two different prices on the number of seats expected to be sold and the variable cost per ticket, including the commission paid to travel agents EB (Click the icon to view the pricing and ticket information) Cick the icon to view additional information.) Read the requirements Requirement 1. If you could charge different prices to business travelers and pleasure travelers, would you? Show your computations. Before determining if you would charge different prices to business travelers and pleasure travelers, calculate the total contribution margin at each price for each type of traveler Total contribution margin Price charged Business Pleasure S 600 1,350 Data Table 6 Requirements Number of Seats Expected to Be Sold 1. If you could charge different prices to business travelers and pleasure travelers, would you? Show your computations. Price Chaged Variable Cost per Ticket Pleasure Business 225 215 2. Explain the key factor (or factors) for your answer in requirement 1 3. How might Costal Airways implement price discrimination? That is, what plan S 600 S 65 110 could the airline formulate so that business travelers and pleasure travelers each pay the price the airline desires? 1,350 150 25 Print Done PrintDone iMore Info Pleasure travelers start their travel during one week, spend at least one weekend at their destination, and return the following week or thereafter. Business travelers usually start and complete their travel within the same work week. They do not stay over weekends. Assume that round-trip fuel costs are fixed costs of $18,500 and that fixed costs allocated to the round-trip flight for airplane-lease costs, ground services, and flight-crew salaries total $150,000 PrintDone P13-34 (book/static) Question Help Costal Airways is about to introduce a daily round-trip flight from New York to Los Angeles and is determining how to price its round-trip tickets. The market research group at Costal Ainvays segments the market into business and pleasure travelers. It provides the following information on the effects of two different prices on the number of seats expected to be sold and the variable cost per ticket, including the commission paid to travel agents EB (Click the icon to view the pricing and ticket information) Cick the icon to view additional information.) Read the requirements Requirement 1. If you could charge different prices to business travelers and pleasure travelers, would you? Show your computations. Before determining if you would charge different prices to business travelers and pleasure travelers, calculate the total contribution margin at each price for each type of traveler Total contribution margin Price charged Business Pleasure S 600 1,350 Data Table 6 Requirements Number of Seats Expected to Be Sold 1. If you could charge different prices to business travelers and pleasure travelers, would you? Show your computations. Price Chaged Variable Cost per Ticket Pleasure Business 225 215 2. Explain the key factor (or factors) for your answer in requirement 1 3. How might Costal Airways implement price discrimination? That is, what plan S 600 S 65 110 could the airline formulate so that business travelers and pleasure travelers each pay the price the airline desires? 1,350 150 25 Print Done PrintDone iMore Info Pleasure travelers start their travel during one week, spend at least one weekend at their destination, and return the following week or thereafter. Business travelers usually start and complete their travel within the same work week. They do not stay over weekends. Assume that round-trip fuel costs are fixed costs of $18,500 and that fixed costs allocated to the round-trip flight for airplane-lease costs, ground services, and flight-crew salaries total $150,000 PrintDone
