TransPacific Airlines (TPA) budgeted 165 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 125 cents per mile. The budgeted average price was 137 cents per passenger mile. The operating data for the year show that TPA flew 142.56 million passenger miles with an average price of 82 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.) → Show Transcribed Text 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.) a. Selling price variance b. Sales volume variance c. Market size variance d. Market share variance
TransPacific Airlines (TPA) budgeted 165 million passenger miles, or 5% of the total market for the year just completed, at a contribution margin of 125 cents per mile. The budgeted average price was 137 cents per passenger mile. The operating data for the year show that TPA flew 142.56 million passenger miles with an average price of 82 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.) → Show Transcribed Text 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.) a. Selling price variance b. Sales volume variance c. Market size variance d. Market share variance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:TransPacific Airlines (TPA) budgeted 165 million passenger miles, or 5%
of the total market for the year just completed, at a contribution margin
of 125 cents per mile. The budgeted average price was 137 cents per
passenger mile.
The operating data for the year show that TPA flew 142.56 million
passenger miles with an average price of 82 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.)
Show Transcribed Text
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.)
a. Selling price variance
b. Sales volume variance
c. Market size variance
d. Market share variance
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