e edugen wileyplus.com o M Weygandt, Financial& Managerial Accounting, 2e Help i

Question

e edugen wileyplus.com o M Weygandt, Financial& Managerial Accounting, 2e Help i System Exercise 20-4 (Part Level Submission) Comfi Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its aperations, Both panes peat o passengers each, and they fly commuters from Comfi's base airpert to the major city in the state, Metropolis. Each monch, 40 round-trip ights are made. Shown below is a recent month's activity in the form of a cost-volume-profit income statement $64,000 Fare revenues (400 passenger flights) Variable costs $18,600 800 Snacks and drinks Landing fees Supplies and forms 1,20022,400 41,600 Centribution margin Fixed costs 2,950 15,300 Airport hanger fees Net income s20,600 (a1) Calculate the break-even point in dellars. Break-even pont 8

Explanation / Answer

Answer to part 1:

Calculation of Contribution margin Ratio:

Contribution Margin Ratio = Contribuiton margin / Fare Revenue

Contribution Margin Ratio = 41,600/ 64000

Contribution Margin Ratio = 65%

Calculation of Breakeven point in Dollars:

Breakeven Point = Fixed costs/Contribution margin ratio

Breakeven Point = 20800/65%

Break even point in Dollars = $ 32,000.

====================================================================

Answer to part 2:

Particulars A B C Selling Price 11 13 20 Less: Variable costs and Expenses 6 11 17 Contribution Margin 5 2 3 MAchine Hours to Produce a single product 2 1 2 Contribution Margin per unit of Limited Resource Hour (Contribution margin/Machine hours to Produce a single Product) $ 2.5 $ 2 $ 1.5

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.