Pharoah Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Pharoah's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 parcong flights) CIO 000

Pharoah Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Pharoah's base airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is a recent month's activity in the form of a cost-volume-profit income statement. Fare revenues (400 parcong flights) CIO 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Without calculations, determine the contribution margin at the break-even point.
Break-even point $

Pharoah Airways, Inc., a small two-plane passenger airline, has asked for your assistance in some basic
analysis of its operations. Both planes seat 10 passengers each, and they fly commuters from Pharoah's base
airport to the major city in the state, Metropolis. Each month, 40 round-trip flights are made. The following is
a recent month's activity in the form of a cost-volume-profit income statement.
Fare revenues (400 passenger flights)
Variable costs
Fuel
Snacks and drinks
Landing fees
Supplies and forms
Contribution margin
Fixed costs
Depreciation
Salaries
Advertising
Airport hanger fees
Net income
$12,600
720
1,800
1,080
2,700
13,500
450
1,575
$43,200
16,200
27,000
18,225
$8,775

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