The topic of revenue increases or expense reductions using the concept of break-even is well covered in the chapter. Use variable costing or contribution margin analysis to BUILD the response. The CEO of the company has presented you with a situation and their thoughts, your job as the CFO is to return with solid accounting advise and analysis.

TIF 19-3 Communication Sun Airlines is a commercial airline that targets business and non-business travelers. In recent months, the airline has been unprofitable. The company has break-even sales volume of 75% of capacity, which is significantly higher than the industry average of 65%, Sun's CEO, Neil Armstrong, is concerned about the recent string of losses and is considering a strategic plan that could reduce the break-even sales volume by increasing ticket prices. He has asked for your help in evaluating this plan. Write a brief memo to Neil Armstrong evaluating this strategy