Global Air is considerng a new flight between Atlanta and Los Angeles. The avaerage fare per seat for the flight is $760.The cost associated with the flight are as follows: Fixed cost for the flight Crew Salaries $5,000 Operating Costs 50,000 Aircraft Depreciation 25,000 Total: $80,000 Variable cost per passenger Passenger check-in $20 Operating Costs: 100 Total: $120 The airline estimates that the flight will sell 175 seats. a. determine the break-even number of passengers per flight b. Based on answer in (a), should the airline add this flight to it's schedule? c. How much profit should each flight produce? d. What additionl issues might the airline consider in this decision?
Global Air is considerng a new flight between Atlanta and Los Angeles. The avaerage fare per seat for the flight is $760.The cost associated with the flight are as follows:
Fixed cost for the flight
Crew Salaries $5,000
Operating Costs 50,000
Aircraft
Total: $80,000
Variable cost per passenger
Passenger check-in $20
Operating Costs: 100
Total: $120
The airline estimates that the flight will sell 175 seats.
a. determine the break-even number of passengers per flight
b. Based on answer in (a), should the airline add this flight to it's schedule?
c. How much profit should each flight produce?
d. What additionl issues might the airline consider in this decision?
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