Management Accounting Chapter 16
TransPacific Airlines (TPA) budgeted 155 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 115 cents per mile. The budgeted average price was 82 cents per passenger mile.
The operating data for the year show that TPA flew 133.92 million passenger miles with an average price of 78 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 varianceb.
b. Sales volume variancec.
c. Market size varianced.
d. Market share variance
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10.7
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airline service, using small jets. The airline connects four major
cities: Charlotte, Pittsburgh, Detroit, and San Francisco. The
company expects to fly 170,000 miles during a month. The following
costs are budgeted for a month: Fuel $2,120,000 Ground personnel
788,500 Crew salaries 850,000 Depreciation 430,000 Total costs
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individual flights in order to gauge the profitability of...
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10.7
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