Mary is a travel agent. She intends to sell her customers a special round-trip airline ticket package. She is able to purchase the package from the airline carrier for $170 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Mary for any unsold ticket packages. Fixed costs include $5,140 in advertising costs. For every 135 round-trip airline ticket package sold, operating income will increase by A) $34,000 B) $27,000 C) $4,050 D) $22,950

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter9: Deduct Ions: Employee And Self-employed - Related Expenses
Section: Chapter Questions
Problem 42P
icon
Related questions
Question

Financial Accounting

Mary is a travel agent. She intends to sell her customers
a special round-trip airline ticket package. She is able to
purchase the package from the airline carrier for $170
each. The round-trip tickets will be sold for $200 each
and the airline intends to reimburse Mary for any unsold
ticket packages. Fixed costs include $5,140 in advertising
costs. For every 135 round-trip airline ticket package
sold, operating income will increase by
A) $34,000
B) $27,000
C) $4,050
D) $22,950
Transcribed Image Text:Mary is a travel agent. She intends to sell her customers a special round-trip airline ticket package. She is able to purchase the package from the airline carrier for $170 each. The round-trip tickets will be sold for $200 each and the airline intends to reimburse Mary for any unsold ticket packages. Fixed costs include $5,140 in advertising costs. For every 135 round-trip airline ticket package sold, operating income will increase by A) $34,000 B) $27,000 C) $4,050 D) $22,950
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
CONCEPTS IN FED.TAX., 2020-W/ACCESS
CONCEPTS IN FED.TAX., 2020-W/ACCESS
Accounting
ISBN:
9780357110362
Author:
Murphy
Publisher:
CENGAGE L
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage