Question scope: Short term decision making Indigo Airlines provides its passengers with the option of joining their club, which entitles them to use club facilities at any Malaysian airport. Club members have access to a private lounge and restaurant, as well as discounts on food and drinks. Due to the pandemic, Indigo had been facing a decline in profit, thus their club has shown consistent loss. The recent statement are as follows: Sales revenue RM150,000 Variable expenses: (70,000) (40,000) (25,000) Food and drinks Personnel Variable overhead Contribution margin Fixed expenses: Club building Depreciation Supervisory salary Airport fees General overhead (allocated) Profit (loss) 15,000 (30,000) (25,000) (15,000) (10,000) (65,000) The variable fees for all clubs can be avoided if the club stops producing. Indigo Airlines, on the other hand, has agreed to keep the club house as supervisors will no longer be employed if the club closes, and Indigo will no longer pay airport fees. Requirements: Determine if Indigo Airlines' club services should be terminated. Show the outcomes from your calculations.

Question scope: Short term decision making Indigo Airlines provides its passengers with the option of joining their club, which entitles them to use club facilities at any Malaysian airport. Club members have access to a private lounge and restaurant, as well as discounts on food and drinks. Due to the pandemic, Indigo had been facing a decline in profit, thus their club has shown consistent loss. The recent statement are as follows: Sales revenue RM150,000 Variable expenses: (70,000) (40,000) (25,000) Food and drinks Personnel Variable overhead Contribution margin Fixed expenses: Club building Depreciation Supervisory salary Airport fees General overhead (allocated) Profit (loss) 15,000 (30,000) (25,000) (15,000) (10,000) (65,000) The variable fees for all clubs can be avoided if the club stops producing. Indigo Airlines, on the other hand, has agreed to keep the club house as supervisors will no longer be employed if the club closes, and Indigo will no longer pay airport fees. Requirements: Determine if Indigo Airlines' club services should be terminated. Show the outcomes from your calculations.

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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am. 132.
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