Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Number of Passengers 0 10 20 30 40 50 60 70 80 90 100 Total Cost (Dollars per flight) 25,000 35,000 40,000 43,000 45,000 46,000 47,000 47,700 48,000 48,200 48,100 Given the information presented in the previous table, the fixed cost to operate this flight is $
Q: Assessing Financial Statement Effects of Trading and Available-for-Sale Securities Use the…
A: This equation is the foundation of double-entry bookkeeping, which is the standard method for…
Q: The company has available the following information necessary for the preparation of the budget for…
A: CASH BUDGET Cash Budget is a detailed budget of cash income and cash expenditure incorporating both…
Q: Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory…
A: FIFO - It is a method of inventory valuation in which goods received first is issued first.LIFO - It…
Q: ! Required information Use the following information for the Exercises below. [The following…
A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
Q: The following are selected 2023 transactions of Blue Spruce Corporation. Sept. 1 Oct. 1 1 (a)…
A: An entity makes cash purchases and purchases on account. When an entity purchases on account the…
Q: Vaughn Inc. uses a calendar year for financial reporting. The company is authorized to issue…
A: Earnings per share is that part of the company's earnings that is available to be distributed to the…
Q: Lin Corporation has a single product whose selling price is $135 per unit and whose variable expense…
A: MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is one of the Important Cost…
Q: During the first two months of 2022, Wildhorse Company incurred the following direct labor costs:…
A: The break-even sales are the sales where the business earns no profit or loss during the period. The…
Q: On May 4, Year 1, Steger Company purchased a tract of land as a factory site for $1,630,000. An…
A: As per IFRS/IAS 16 Property plant and Equipment, cost of property plant and equipment consists of…
Q: A company had total sales of $940,000, net sales of $916,400, and an average accounts receivable of…
A: Lets understand the basics.Account receivable turnover ratio is a efficiency ratio which shows how…
Q: Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive…
A: Journal entries are a primary record of every business transactions.Treasury stock is also known as…
Q: Lucia Company has set the following standard cost per unit for direct materials and direct labor.…
A: The variance is calculated as the difference between the standard and actual production cost data.…
Q: 11. Vidal Inc. is involved in a complex long-term construction contract with one of their client.…
A: Data and facts concerning a company's monetary transactions, performance, and general financial…
Q: Skysong Productions produces all of its parts in the machining department and puts them together in…
A: Equivalent units represent the partially completed units in a production process, combining both…
Q: Required information Exercise 5-6A (Static) Income tax effect of shifting from FIFO to LIFO LO 5-1…
A: Calculating net cash flow from operational activities is similar to determining how much actual cash…
Q: At the beginning of the month, the Forming Department of Martin Manufacturing had 27,000 units in…
A: The equivalent units are calculated on the basis of the percentage of the work completed during the…
Q: Multiple Choice O $214,200. $208,320. $198,030.
A: A hypothetical tax expense is an estimated or projected expense that a company may record on its…
Q: REI sells snowboards. Assume the following information relates to REI's purchases of snowboards…
A: FIFO (First-In, First-Out) is an inventory method where the oldest items are sold first.LIFO…
Q: Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment,…
A: DECLARATION OF DIVIDENDSDividend is the amount paid by the Corporation its shareholders in return…
Q: Fish Inc paid $65,000 to Electro on December 20th, 2016 for the development, testing and…
A: Income Statement: A financial report showing a company's revenue, expenses, and profit or loss over…
Q: Carolyn has an AGI of $38,800 (all from earned income) and two qualifying children and is filing as…
A: The Earned Income Credit (EIC) is a tax credit available to eligible individuals and families with…
Q: Prepare the journal entries to record the following sales transactions in Novak Corp's books. Novak…
A: The perpetual inventory system is an accounting method that records inventory changes continuously…
Q: -Sunland Corporation produces microwave units. The following per-unit cost information is available:…
A: The variable cost per unit comprises direct materials, direct labor and variable manufacturing…
Q: Sunland Corporation had the following items in inventory as at December 31, 2023: Item No. ૬ ૪ ૪ 84…
A: Direct Method :In Direct method the business will charge the inventory write-off to COGS…
Q: Macintosh Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2013. Inventory…
A: Journal entry is the first stage of accounting process.Journal entry used to record business…
Q: Prepare journal entries to record each of the following transactions. The company records purchases…
A: Journal entries (JE) refers to recording of transactions into the books of accounts or original…
Q: On January 1, 2020, Windsor Corporation had $2,000,000 of $10 par value common stock outstanding…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: A company has provided the following cost, price, and sales data: Selling price Variable expenses…
A: MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is one of the Important Cost…
Q: At the end of the month of July you close the books of your company and received the bank statement.…
A: Bank reconciliation adjusting entries are journal entries made to correct the book balance of the…
Q: What will be the balance on September 027 in a fund which is accumulated by aking $30,000 annual…
A: The estimated amount that an initial quantity of money will grow to, taking into account the…
Q: University Car Wash purchased new soap dispensing equipment that cost $270,000 including…
A: Depreciation is considered an expense charge on the value of the asset. It can be calculated by…
Q: Griswold's, Incorporated (GI), began operations in January, selling inexpensive sunglasses to large…
A: Net Accounts Receivable is a balance of receivables after deducting allowance for doubtful accounts.…
Q: Analyzing and Identifying Financial Statement Effects of Stock Issuances During the current year,…
A: The entity raises equity by issuing common shares. The equity shareholders have voting rights and…
Q: Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make…
A: The Effective Annual Rate, also known as the Annual Equivalent Rate (AER) or the Annual Percentage…
Q: Trevor Mills produces agricultural feed at its only plant. Materials are added at the beginning of…
A: Total direct labor and factory overhead expenses make up conversion costs. They are bundled together…
Q: HH Corp manufactures and sells brushes and combs. The company can sell all of either product it can…
A: While analysing the process of production, the management comes across the bottleneck…
Q: adarius Toney received $9,160 c
A: Gross income includes your wages, dividends, capital gains, business income, retirement…
Q: al shares of $1 par value common stock for $62 per share. of treasury stock for $65 per share. nd of…
A: Treasury stock is re acquired stock that is bought back by the company from its stock holders. This…
Q: On January 1, Year 1, the Dartmouth Corporation paid $20,000 for major improvements on a…
A: Depreciation is defined as the accounting method implemented to allocate the cost of a long-term…
Q: Allen Corporation currently makes the nylon convertible top for its main product, a fiberglass boat…
A: It is the process of making decisions that involve the management of costs to achieve long-term…
Q: Which limitation of an income statement occurs when one company uses an accelerated depreciation…
A: The technique is determined by criteria such as the asset's predicted usage pattern and the…
Q: Allowance for Doubtful Accounts has a credit balance of $608 at the end of the year (before…
A: Adjusting entries are journal entries that are passed at the end of accounting period to adjust the…
Q: Required information [The following information applies to the questions displayed below.] Ramirez…
A: Units of activity method:-The asset under this method is depreciated on the basis of total hours…
Q: Colonels uses a traditional cost system and estimates next year's overhead will be $651,000, with…
A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost…
Q: Required: Prepare the journal entries required on each of the above dates. (If no entry is required…
A: Journal entries are the fundamental records in accounting used to track financial transactions. They…
Q: On March 13, a company writes off a customer's account of $3,900. On June 3, the customer…
A: The allowance for doubtful accounts is created to record the estimated bad debt expenses for the…
Q: On March 13, a company writes off a customer's account of $3,900. On June 3, the customer…
A: An allowance method is a method used to provide for losses due to uncollectible accounts. Under this…
Q: Sarah Allen owns and operates Blossom, a bakery that creates personalized birthday cakes for a…
A: Break-even units represent the number of units sold to cover the costs like variable and fixed. When…
Q: Required information [The following information applies to the questions displayed below.] The…
A: The cost of the products manufactured seems to be significant since it provides management with a…
Q: Clear Water Company reports the following balance sheet accounts as of December 31. $ 47,500 2,900…
A: Balance Sheet :- Balance sheet gives the financial position of the company. It shows the assets and…
Munabhai
Don't upload image please
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- 5 In an effort to increase profits, Pegasus Airlines is thinking about dropping several flights that appear to be unprofitable. A typical income statement for one round-trip of one such flight (flight 482) is as follows: Ticket revenue (175 seats x 40% occupancy × $200 ticket price). Variable expenses ($15 per person) Contribution margin Flight expenses: Salaries, flight crew Flight promotion Depreciation of aircraft Fuel for aircraft Liability insurance Salaries, flight assistants Baggage loading and flight preparation Overnight costs for flight crew and assistants at destination Total flight expenses Net operating loss $ 14,000 1,050 12,950 $ 1,800 750 1,550 5,800 4,200 1,500 1,700 300 17,600 $ (4,650) 100.0% 7.5 92.5% The following additional information is available about flight 482: a. Members of the flight crew are paid fixed annual salaries, whereas the flight assistants are paid based on the number of round trips they complete. b. One-third of the liability insurance is a…Many airlines frequent-flier programs upgrade elite (high-volume) flyers one, three, or five days in advance from economy to first class. Respond to the following in a minimum of 175 words: What are the differential costs of upgrading frequent flyers this close to the scheduled flight? (remember, differential revenues are not the same as differential costs) What are the opportunity costs of upgrading frequent flyers this close to the scheduled flight? What are the opportunity costs of not upgrading frequent flyers in this manner?Global Air is considering a new flight between Atlanta and Los Angeles. The average fare per seat for the flight is $780. The costs associated with the flight are as follows: Fixed costs for the flight: Crew salaries................................................ $ 4,860 Operating costs........................................... 50,000 Aircraft depreciation.................................. 25,000 Total......................................................... $ 79,860 Variable costs per passenger: Passenger check-in..................................... $ 20 Operating costs........................................... 100 Total......................................................... $ 120 The airline estimates that the flight will sell 170 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…
- An airline is considering two types of engine systems for use in its planes:1'111 System A costs $100,000 and uses 40,000 gallons of fuel per 1,000 hours of operation at the average load encountered in passenger service.lliB System B costs $200,000 and uses 32,000 gallons of fuel per 1,000 hours of operation at the average load encountered in passenger service.Both engine systems have the same life and the same maintenance and repair record. and both have a three-year life before any major overhaul is required. Each system has a salvage value of 10% of the initial investment. If jet fuel costs $4.80 per gallon currently and fuel consumption is expected to increase at the rate of 6% per year because of degrading engine efficiency, which engine system should the firm install? Assume 2,000 hours of operation per year and an MARR of 10%. Use the AE criterion. What is the equivalent operating cost per hour for each engine?Analyze Pacific Airways Pacific Airways provides air travel services between Los Angeles and Seattle. Cost information per flight is as follows: Each flight has a capacity of 150 seats, with an average of 125 seats sold per flight at an average ticket price of 180. Assume Pacific Airways is considering a new service that would provide tickets at half price. Passengers would need to fly standby to receive the discount, but would be provided a flight for a given day of travel. An analysis revealed that an average of 8 existing passengers would use the new discounted tickets for travel. In addition, 15 new passengers would be attracted to the offer. a. Determine the contribution margin per passenger for the full-priced ticket. b. Determine the break-even number of seats sold per flight. c. Determine the contribution margin per passenger for discounted tickets. d. Should Pacific Airways offer the discounted ticket plan? Answer the question by computing the incremental contribution margin per flight for the plan.The Apollo Delivery Service has the following information about its truck fleet miles and operating costs Year 2018 2019 2020 Miles 500,000 600,000 700,000 Operating Costs $320,000 $370,000 $420,000 What is the best estimate of fixed costs for fleet operating expenses using the high-low method? $100,000 $370,000 $70,000 $200,000
- Pac Coast Airlines has been incurring losses for the past few years. In an attempt to improve the overallfinancial performance of the company, the general manager is considering discontinuing several of theflights. Flight 102 from Atlanta, Georgia to Paris, France is one such flight. The contribution marginstatement for this particular flight is shown below.Pac Coast AirlinesContribution Margin Statement For the Year Ended December 31, 2019Flight 102 Revenue $2,000,000Less: Variable Costs 1,500,000Contribution Margin 500,000Less: Fixed Costs 800,000Income from Operations ($300,000) The following additional information is also available regarding flight 102: 80% of the segments fixed costs will remain with the company if the flight is discontinued. The remaining20% of the fixed costs will no longer be incurred by the company if the flight is discontinued. If the flight is discontinued, contribution margin will increase by a total of $200,000 in other segments ofPac Coast Airlines.Should…An airline is considering two types of engine systems for use in its planes:A. System A costs $100,000 and uses 40,000 gallons of fuel per 1,000 hours of operation at the average load encountered in passenger service.B. System B costs $200,000 and uses 32,000 gallons of fuel per 1,000 hours of operation at the average load encountered in passenger service.Both engine systems have the same life and the same maintenance and repair record. and both have a three-year life before any major overhaul is required. Each system has a salvage value of 10% of the initial investment. If jet fuel costs $4.80 per gallon currently and fuel consumption is expected to increase at the rate of 6% per year because of degrading engine efficiency, which engine system should the firm install? Assume 2,000 hours of operation per year and an MARR of 10%. Use the AE criterion. What is the equivalent operating cost per hour for each engine?On-time arrivals, lost baggage, and customer complaints are three measures that are typically used to measure the quality of service being offered by airlines. Suppose that the following values represent the on-time arrival percentage, amount of lost baggage, and customer complaints for 10 U.S. airlines. a. Based on the data above, if you randomly choose a Delta Air Lines flight, what is the probability that this individual flight will have an on-time arrival? b. If you randomly choose 1 of the 10 airlines for a follow-up study on airline quality ratings, what is the probability that you will choose an airline with less than two mishandled baggage reports per 1,000 passengers? c. If you randomly choose 1 of the 10 airlines for a follow-up study on airline quality ratings, what is the probability that you will choose an airline with more than one customer complaint per 1,000 passengers? d. What is the probability that a randomly selected AirTran Airways flight will not arrive on time?
- The airline is presently offering its passengers to join a club that entitles them to use the club facilities. The controller ascertained that all variable costs could be avoided if the club operations will be eliminated, including some fixed costs: Supervisor's salaries Airport fees Depreciation on equipment P40,000 10,000 20,000 The club's income statement reported a net loss as shown below: Sales P400,000 Variable Costs: Direct materials P140,000 80,000 Direct labor Manufacturing overhead Contribution margin Fixed Costs: 50,000 270,000 P130,000 P60,000 40,000 20,000 10,000 Depreciation on equipment Supervisor's salaries Insurance Airport Fees General overhead allocated 20,000 150,000 Net Income P20,000 5. Determine the direct contribution margin. 6. Should the club be continued or eliminated?Zero Turbulence Airline provides air transportation services between Los Angeles, California, and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the following operating statistics: Line Item Description Amount Fuel $6,698 Flight crew salaries 5,130 Airplane depreciation 2,422 Variable cost per passenger—business class 55 Variable cost per passenger—economy class 45 Round-trip ticket price—business class 565 Round-trip ticket price—economy class 305 It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight. a. Compute the break-even number of seats sold on a single round-trip flight for the overall company product, M. Assume that the overall product mix is 10% business class and 90% economy class tickets.Total number of seats at break-even fill in the blank 1 of 1 seats b. How many business class and economy class seats would be sold at the break-even…Super Speedy Delivery Services has the collected the following information about operating expenditures for its delivery truck fleet for the past five years:YearMilesOperating Costs201655,000$195,000201770,000$210,000201850,000$180,000201965,000$205,000202085,000$225,150 Using the high-low method, what is the cost estimate for variable costs for 2021?Select one:A. $1.60B. $1.50C. $1.29D. $2.00