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b ) The concept of operating leverage ?
Problem 3 : Airway Express has an evening flight from LA to NY with an average of 80 passengers and a return flight the next afternoon with an average of 50 passengers . The plane makes no other trip . The charge for the plane remaining in NY overnight is $ 1,200 and would be zero in LA . The airline is contemplating eliminating the night flight out of LA and replacing it with a morning flight . The estimated number of passengers is 70 in the morning and 50 in the return afternoon flight . The one-way ticket for any flight is $ 200 . The operating cost of the plane for each flight is $ 11,000 . The fixed cost for the plane is $ 3,000 per day whether it flies or not .
a ) Should the airline replace its night from LA with a morning flight ?
b ) Should the airline remain in business ?
Problem 11 : The Goldberg- Scheinman Publishing Company is publishing a new managerial economics text for which it has estimated the following total fixed and average variable costs .
Total fixed costs : Copy editing Typesetting
b ) The concept of operating leverage ?
Problem 3 : Airway Express has an evening flight from LA to NY with an average of 80 passengers and a return flight the next afternoon with an average of 50 passengers . The plane makes no other trip . The charge for the plane remaining in NY overnight is $ 1,200 and would be zero in LA . The airline is contemplating eliminating the night flight out of LA and replacing it with a morning flight . The estimated number of passengers is 70 in the morning and 50 in the return afternoon flight . The one-way ticket for any flight is $ 200 . The operating cost of the plane for each flight is $ 11,000 . The fixed cost for the plane is $ 3,000 per day whether it flies or not .
a ) Should the airline replace its night from LA with a morning flight ?
b ) Should the airline remain in business ?
Problem 11 : The Goldberg- Scheinman Publishing Company is publishing a new managerial economics text for which it has estimated the following total fixed and average variable costs .