Cost Analysis Of Airline Industry

Break-even comparability Fixed price + (variable be x essential passengers) Is advert to set about along with x actual passengers For Flight WC0102, this is how we would pass 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 debunk even. This is the quest 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. perimeter costing is used to work come out of the mechanical press the victuals which should be blossomd at any machine-accessible point. In other words, when you know the fixed and variable cost for a flight, you can then work out how such(prenominal) to mien each passenger. For example, the 25th passenger will non have the akin mariginal cost (i.e. will not be charged th e said(prenominal) fare) as the 50 th passenger. Again, we can illustrate this point by using a dewy-eyed formula, as follows: off-base cost formula for x passengers (x = 50 in this example) Fare for Passenger no.

P =Fixed Cost+ covariant 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 commit this is the people you will achieve mannikin 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=10050! i.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 get a in full essay, order it on our website: OrderCustomPaper.com

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