Comfi Airways, Inc., a tiny two-plane passenger airline, has asked for your assistance in some standard analysis of its operations. Both planes seat 10 passengers each, and also they fly commuters from Comfi�s base airport to the significant city in the state, Metropolis. Each month 40 round-pilgrimage flights are made. Shvery own listed below is a current month�s activity in the form of a cost-volume-profit income statement.

You are watching: Without calculations, determine the contribution margin at the break-even point.

Fare revenues (400 fares) $46,500
Variable costs
Fuel $16,315
Snacks and also drinks 770
Landing fees 1,800
Supplies and also forms 1,110 19,995
Contribution margin 26,505
Fixed costs
Depreciation 2,940
Salaries 14,196
Advertising 420
Airport hanger fees 1,710 19,266
Net income $7,239

(a) Calculate the break-even point in (1) dollars and (2) number of fares. (Round answers to 0 decimal area, e.g. 1,225.)

1. Break-also point

$

2. Break-also point

fares

(b) Without calculations, identify the contribution margin at the break-also allude.

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Break-even point

$

(c) If fares were decreased by 10%, an additional 100 fares could be generated. However before, complete variable prices would certainly increase by 20%. (Round answers to 0 decimal location, e.g. 1,225.) (1) How much would net revenue be affected by this change?

Net income decreases / boosts to $

(2) Should the fare decrease be adopted? No / Yes


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Transcribed image text: Comfi Airmeans, Inc., a tiny two-aircraft passenger airline, has asked for your assistance in some standard evaluation of its operations. Both planes seat 10 passengers each, and they fly commuters from Comfi�½s base airport to the significant city in the state, Metropolis. Each month 40 round-pilgrimage flights are made. Shown listed below is a current month�½s task in the develop of a cost-volume-profit income statement.Fare earnings (400 fares) $46,500 Variable costs Fuel $16,315 Snacks and drinks 770 Landing fees 1,800 Supplies and develops 1,110 19,995 Contribution margin 26,505 Fixed costs Depreciation 2,940 Wages 14,196 Advertising 420 Airport hanger fees 1,710 19,266 Net income $7,239(a) Calculate the break-also allude in (1) dollars and also (2) variety of fares. (Round answers to 0 decimal area, e.g. 1,225.)1. Break-also point$ No / Yes (2) Should the fare decrease be adopted? decreases / rises to $ (c) If fares were decreased by 10%, a second 100 fares can be created. However, complete variable costs would boost by 20%. (Round answers to 0 decimal area, e.g. 1,225.)(1) How a lot would certainly net earnings be impacted by this change?Net earnings fares(b) Without calculations, determine the contribution margin at the break-even point.Break-even point$ 2. Break-even point
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