Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is...
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Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows: Variable Costs Fixed Costs per Flight per Passenger Plane depreciation $9,500 Crew salaries 900 Fuel 2,500 $18 Ground salaries 1,100 12 Airport fees 2,100 Passenger services Total $16,100 10 $40 Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of $180. Assume Pacific Airways is considering a new service that would provide tickets at half price. Passengers would need to fly standby to receive the discount, but would be provided a flight for a given day of travel. An analysis revealed that an average of 8 existing passengers would use the new discounted tickets for travel. In addition, 15 new passengers would be attracted to the offer. a. Determine the contribution margin per passenger for the full-priced ticket. b. Determine the break-even number of seats sold per flight. $ seats c. Determine the contribution margin per passenger for discounted tickets. Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows: Variable Costs Fixed Costs per Flight per Passenger Plane depreciation $9,500 Crew salaries 900 Fuel 2,500 $18 Ground salaries 1,100 12 Airport fees 2,100 Passenger services Total $16,100 10 $40 Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of $180. Assume Pacific Airways is considering a new service that would provide tickets at half price. Passengers would need to fly standby to receive the discount, but would be provided a flight for a given day of travel. An analysis revealed that an average of 8 existing passengers would use the new discounted tickets for travel. In addition, 15 new passengers would be attracted to the offer. a. Determine the contribution margin per passenger for the full-priced ticket. b. Determine the break-even number of seats sold per flight. $ seats c. Determine the contribution margin per passenger for discounted tickets.
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