(1)
Contribution margin ratio = contribution margin/sales
= $30720/$48000 = 64%
Break even point (dollar sales) = fixed expenses/contribution margin ratio
= $19200/64%
= $30000
(2)
Contribution margin per unit = $30720/400 = 76.8
Break even point (unit sales) = fixed expenses/contribution margin per unit
= $19200/$76.8
= 250 flights
(3)
contribution margin at break even point is always equal to fixed expenses.
Therefore,
contribution margin = $19200
(4)
Unit ticket price = $48000/400 = $120
new ticket price = $120 x 90% = $108
new number of passenger flights = 400 x 125% = 500
new total variable cost = $17280 x 125% = $21600
therefore,
net income = (500 x $108) - $21600 - $19200
= $13200
net income increases to $13200 (from earlier $11520)
ticket price decrease should be adopted.
Question 2 Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $40,000 y Study $13,460 1,900 1,200 17,280 30,720 Fare revenues (400 passenger flights) Variable costs Fuel...
Exercise 19-04 Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Camfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $13,460 720 1,900 1,200 Fare revenues (400 passenger flights) Variable costs Fuel Snacks...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) Variable costs $64,000 Fuel Snacks and drinks Landing fees Supplies and...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $17,040 780 2,100 1,200 Fare revenues (400 passenger flights) Variable costs Fuel Snacks and drinks...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs Fuel $13,120 Snacks and drinks 780 Landing fees...
Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs Fuel $17,210 Snacks and drinks 760 Landing fees...
Sunland Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Sunland’s base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month’s activity in the form of a cost-volume-profit income statement. Fare revenues (400 passenger flights) $48,000 Variable costs Fuel $13,390 Snacks and drinks 790 Landing fees...
E6.4 (LO 1), AP Service Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis Operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit inco statement. Compute break-even point and prepare CVP income statement. $48,000 $14,000 800 2,000 1,200...
Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $ 16,780 710 2,000 1,150 Fare revenues (400 passenger flights)...
Exercise 6-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. Shown below a recent month's activity in the form of a cost-volume-profit income statement. $48,000 $ 16,780 710 2,000 1,150 Fare revenues (400 passenger flights) Variable...