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Penny has prepared the following data to help her in making this decision. Revenues and Costs Under Two Alternatives Nonstop With Stop in Differential Route
Penny has prepared the following data to help her in making this decision. Revenues and Costs Under Two Alternatives Nonstop With Stop in Differential Route Phoenix Amount Passenger $200,000 $225,000 $25,000 Revenue Cargo Revenue 50,000 50,000 O Landing Fee in 0 5,000 (5,000) Phoenix Use of Airport 0 3,000 (3,000) Gate Facilities Flight Crew Cost 2,000 2,500 (500) Fuel 25,000 30,000 (5,000) Meals & Services 4,000 5,000 (1,000) Aircraft 1,000 1,000 O Maintenance Total Revenue 218,000 228,500 (10,500) less Costs Instructions Do the following for this assignment: 1. Identify each cost as relevant or irrelevant. (20 Points) 2. Then analyze your results to determine whether Global Airways should make the stop in Phoenix or continue with the non-stop flight. State the action Global Airways should take. (10 Points)
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