Chapter 6 Cost-Volume-Profit Analysis297Make a DecisionCost-Volume-Profit Analysis for Service CompanierMAD 6-1 Analyze Global Air's cost-volume-profit relationshipsObj. 6Global Air is considering a new flight between Atlanta and Los Angeles. The average fare perseat for the flight is $760. The costs associated with the flight are as follows:Fixed costs for the flight:Crew salaries.....Operating costs .Aircraft depreciation..$ 5,00050,00025,000$80,000Total......Variable costs per passenger:Passenger check-inOperating costs ....Total...$ 20100$120The airline estimates that the flight will sell 175 seats.a. Determine the break-even number of passengers per flight.b. Based on your answer in (a), should the airline add this flight to its schedule?c. How much profit should each flight produce?d.What additional issues might the airline consider in this decision?Obi 6

Obj s Global Air is considering a new flight between Atlanta and Los Angeles. The average fare per seat for the flight is $760. The costs associated with the flight are as follows: Fixed costs for the flight: Crew salaries. $ 5,000 Operating costs Aircraft depreciation.. Total... 50,000 25,000 $80,000 Variable costs per passenger: Passenger check-in Operating costs. Total.... $ 20 ... 100 $120 The airline estimates that the flight will sell 175 seats. a. Determine the break-even number of passengers per flight. b. Based on your answer in (a), should the airline add this flight to its schedule? c. How much profit should each flight produce? irion?

Obj s Global Air is considering a new flight between Atlanta and Los Angeles. The average fare per seat for the flight is $760. The costs associated with the flight are as follows: Fixed costs for the flight: Crew salaries. $ 5,000 Operating costs Aircraft depreciation.. Total... 50,000 25,000 $80,000 Variable costs per passenger: Passenger check-in Operating costs. Total.... $ 20 ... 100 $120 The airline estimates that the flight will sell 175 seats. a. Determine the break-even number of passengers per flight. b. Based on your answer in (a), should the airline add this flight to its schedule? c. How much profit should each flight produce? irion?

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.17EX

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