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1 | ||
Fixed costs | 20250 | |
Divide by Contribution margin ratio | 62.50% | =30000/48000 |
Break-even point | 32400 | |
2 | ||
Fixed costs | 20250 | |
Divide by Contribution margin per passenger flight | 75.00 | =30000/400 |
Break-even point | 270 | flights |
3 | ||
Break-even point | 20250 | |
4 | ||
Revised fare per passenger flight | 108 | =(48000/400)*(1-10%) |
Revised passenger flights | 500 | =400*1.25 |
Variable costs per passenger flight | 45 | =18000/400 |
Fare revenues | 54000 | =500*108 |
Less: Variable costs | 22500 | =500*45 |
Contribution margin | 31500 | |
Less: Fixed costs | 20250 | |
Net income | 11250 | |
Net income increases to $11250 | ||
Yes, the ticket price decrease be adopted |
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