Question
TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70
TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 64 cents per passenger mile.
The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs.
Required:
1. In an effort to understand the operating results, you are asked to compute the following.(Do not round intermediate calculations. Enter your answers in whole dollars.)
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