Fly High Airlines pays its pilots a salary of $14,000 per month. Jet fuel costs $40 per mile flown. Depreciation for each plane is $7,500 per month. Maintenance is performed at a cost of $3,000 per month. The number of passengers per trip varies with each flight. The number of passengers for May totaled 31,680, with the number of passengers for June totaling 34,600 for trips between Miami and Atlanta, a total distance of 660 miles.   Required 1.What effect does the change in the number of passengers have on the following cost of each passenger that flies with Fly High Airlines from Miami to Atlanta? Explain your choices.  Pilot's salary Jet fuel Depreciation Maintenance              2.Complete the table below to show the total cost of the following number of miles flown for a particular month: 31,680 and 34,320 miles. [Table]   3.Identify the behavior of Fly High Airlines’ total cost behavior based on your answer to part B. Explain your choice.

Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter17: Activity Resource Usage Model And Tactical Decision Making
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Fly High Airlines pays its pilots a salary of $14,000 per month. Jet fuel costs $40 per mile flown. Depreciation for each plane is $7,500 per month. Maintenance is performed at a cost of $3,000 per month. The number of passengers per trip varies with each flight. The number of passengers for May totaled 31,680, with the number of passengers for June totaling 34,600 for trips between Miami and Atlanta, a total distance of 660 miles.  

Required

1.What effect does the change in the number of passengers have on the following cost of each passenger that flies with Fly High Airlines from Miami to Atlanta? Explain your choices. 

Pilot's salary

Jet fuel

Depreciation

Maintenance

            

2.Complete the table below to show the total cost of the following number of miles flown for a particular month: 31,680 and 34,320 miles.

[Table]

 

3.Identify the behavior of Fly High Airlines’ total cost behavior based on your answer to part B. Explain your choice. 

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