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TransPacific Airlines (TPA) budgeted 130 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 90
TransPacific Airlines (TPA) budgeted 130 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 90 cents per mile. The budgeted average price was 72 cents per passenger mile. The operating data for the year show that TPA flew 112.32 million passenger miles with an average price of 68 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.) a. Selling price variance b. Sales volume variance c. Market size variance d. Market share variance Favorable Unfavorable
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