0 iete aons hMenain cunting 2 e CES Exercise 20-4 (Part Level Submission) Comfi

Question

0 iete aons hMenain cunting 2 e CES Exercise 20-4 (Part Level Submission) Comfi Alirways, Inc, a small twe-plane passenger airline, has esked for your assistance in some basec analyes of bs operatiors 8oth la 10 passengers each, and they fly commuters from Comfi's base alrport to the major cty in the state, Metropolis are made. Shown below is a recent month's activity in the form of a cost-volume-proft income statement tach menth, 40eund-np fights Fare revenues (400 passenger flights) Variable costs $64,000 Fuel Snacks and drinks Landing fees Supplies and forms $18,600 800 1,800 1,200 22,400 41,600 Contribution margin Fixed costs 2,950 15,500 600 Salaries Airport hanger fees 1,750 20,800 $20,800 (a1) Your answer is correct. Caiculate the break-even point in dollars Break-even point 32000 sHOW SOLUTION LINK TO TEXT 44 F6

Explanation / Answer

a) contribution margin ratio = 41600*100/64000 = 65%

Break even point = Fixed cost/contribution margin ratio

                         = 20800/.65

Break even point = 32000

Break even point = Fixed cost/contribution margin per unit

                         = 20800/104

Break even point = 200 Flights

contribution margin per unit = 41600/400 = 104 per unit

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