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TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable

TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable

FINANCIAL ACCOUNTING
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. 111.

TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable C. Market size variance $ (7,700,000) ( Unfavorable $ d. Market share variance Unfavorable (277,200,000)
Transcribed Image Text:TransPacific Airlines (TPA) budgeted 110 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 70 cents per mile. The budgeted average price was 82 cents per passenger mile. The operating data for the year show that TPA flew 95.04 million passenger miles with an average price of 60 cents per passenger mile. The terrorist activity in the early part of the year in several countries in the region decreased the total miles flown by all airlines for the year by 10%. There is no flexible-budget variance for all costs. Required: 1. In an effort to understand the operating results, you are asked to compute the following. (Do not round intermediate calculations. Enter your answers in whole dollars.) Answer is complete but not entirely correct. a. Selling price variance $ (19) Unfavorable b. Sales volume variance $(12,267,200) Unfavorable C. Market size variance $ (7,700,000) ( Unfavorable $ d. Market share variance Unfavorable (277,200,000)
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