TransPacific Airlines (TPA) budgeted 150 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 110 cents per mile. The budgeted average price was 122 cents per passenger mile. The operating data for the year show that TPA flew 129.60 million passenger miles with an average price of 76 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.)

TransPacific Airlines (TPA) budgeted 150 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 110 cents per mile. The budgeted average price was 122 cents per passenger mile. The operating data for the year show that TPA flew 129.60 million passenger miles with an average price of 76 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.)

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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NUBD Co. budgeted sales of 400,000 calculators at P40 for 2021. Variable manufacturing costs were budgeted at P16 per unit, and fixed manufacturing costs at P10 per unit. A special order offering to buy 40,000 calculators for P23 each was received by NUBD Co. in October 2021. NUBD Co. has sufficient plant capacity to manufacture the additional quantity; however, the production would have to be done on an overtime basis at an estimated additional cost of P3 per calculator. Acceptance of the special order will not affect NUBD's normal sales and no selling expenses would be incurred. What would be the effect on operating profit (loss) if the special order were accepted? *