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20-6i Make a Decision: Cost-Volume-Profit Analysis for Service Companies MAD 20-1 Analyze Global Airs Cost-Volume-Profit...

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Accounting

20-6i Make a Decision: Cost-Volume-Profit Analysis for Service Companies MAD 20-1 Analyze Global Airs Cost-Volume-Profit Relationships Obj. 6 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: Two calculations are shown for costs associated with a flight. The first calculation is for Fixed costs for the flight:. Crew salaries is $5,000; Operating costs is 50,000; Aircraft depreciation is 25,000 (single-ruled); and Total is $80,000 (double-ruled). The second calculation is for Variable costs per passenger:. Passenger check-in is $20; Operating costs is 100 (single-ruled); and Total is $120 (double-ruled). The airline estimates that the flight will sell 175 seats. Determine the break-even number of passengers per flight. Based on your answer in (a), should the airline add this flight to its schedule? How much profit should each flight produce? What additional issues might the airline consider in this decision?

Can you make a business memo based on these answer please?

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