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BUS 5110 Written Assignment 3 Solution

Provided
SP $ 175

VC FC/Month Year
$ 100 $ 350 $ 4,200
$ 30 $ 2,500 $ 30,000
$ 130 $ 500 $ 6,000
$ 3,350 $ 40,200

Year 1 Year 2 Year 3


CM = $175 - $130 CM Ratio = 26% - 2% CM = $175 - $130 - .02*175
$ 45.00 23.71% $ 41.50

CM Ratio = $45 / $175 B-E Sales = $40,200 / 23.71 FC + Target Inc = $40,200 + $10,000
25.71% $ 169,518 $ 50,200

Break-Even = $40,200 / $45 B-E Units = $169,518 / $175 Break-Even = $50,200 / $41.50
893 flights per year 969 flights per year 1,210 flights per year

Per month 74 81 101

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