Cost Analysis Of Airline Industry

Break-even comparability Fixed price + (variable be x echt passengers) Is advert to roll in the hay x actual passengers For Flight WC0102, this is how we would work on this equation : COSTS=REVENUE 10,000 + 50 x P=200 x P =>10,000=150 x P =>P=10,000 150 =>=66.66 =>=67 So, we croup analyze that trajectory WC0102 mustiness sell 67 seats in order to corner even. This is the academic degree at which court matches revenue for that particular flight. Anything on a lower floor 67 passengers, and it will lose money, anything above 67, and it make money. molding costing is used to work come out of the pressure the victuals which should be pointd at any attached point. In other words, when you know the fixed and variable be for a flight, you can then work out how such(prenominal) to tending each passenger. For example, the 25th passenger will non have the akin mariginal cost (i.e. will not be charged the identical fare ) as the 50 th passenger. Again, we can illustrate this point by using a dewy-eyed formula, as follows: peripheral cost formula for x passengers (x = 50 in this example) Fare for Passenger no. P =Fixed Cost+ inconsistent cost per Passenger P Where x = 50 =>10,000+50 50 =>250This is the marginal cost and hence the fare you should charge the 50 passengers, if you weigh this is the people you will achieve fount of other marginal costs for flight WC0102 are (Note : if we believe this is the volume we will achieve, then this represents the fare we should charge in order to break even ) P = 1Marginal Cost=10050i.e10,000 + 50 1 P = 10Marginal Cost=1050i.e10,000 + 50 10 P = 25Marginal Cost=450i.e10,000 + 50 25 P = 50Marginal Cost=250i.e10,000 + 50 50 P = 100Marginal Cost=150i.e10,000 + 50 100If you want to know a in full essay, order it on our website: OrderCustomPaper.com

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