Ask Question
9 November, 12:00

Lofty Airlines has a flight for which the regular ticket price is $200 and the variable costs per passenger are $50. Fixed costs assigned to each flight are $12,000. Each flight has a capacity of 125 seats, with an average of 95 seats sold at the regular price. To attract customers to the last 30 unsold seats, Lofty discounts the tickets by 50% for standby passengers. The contribution margin per standby passenger is

a. $25

b. $150

c. $100

d. $50.

+1
Answers (1)
  1. 9 November, 12:06
    0
    The correct answer is D.

    Explanation:

    Giving the following information:

    Lofty Airlines has a flight for which the regular ticket price is $200 and the variable costs per passenger are $50. To attract customers to the last 30 unsold seats, Lofty discounts the tickets by 50% for standby passengers.

    Contribution margin = selling price - unitary variable cost

    CM = 100 - 50 = 50
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Lofty Airlines has a flight for which the regular ticket price is $200 and the variable costs per passenger are $50. Fixed costs assigned ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers