Answered step by step
Verified Expert Solution
Question
1 Approved Answer
TransPacific Airlines (TPA) budgeted 85 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 45
TransPacific Airlines (TPA) budgeted 85 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 45 cents per mile. The budgeted average price was 57 cents per passenger mile. The operating data for the year show that TPA flew 73.44 million passenger miles with an average price of 50 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started