Case Assignment 5 Principles of Accounting

Case Assignment 5 Principles of Accounting - TUI UNIVERSITY...

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TUI UNIVERSITY Dean J. Keveles Module 5 Case Assignment ACC403 Principles of Accounting Dr. Eugene J. Nesbitt June 15, 2011
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In this Relevant Costing Problem, Westcoast Air Co. leases a single jet aircraft and operates between San Francisco and the Fiji. Flights leave San Francisco on Mondays and Thursdays and depart from Fiji on Wednesdays and Saturdays. Westcoast Air Co. cannot offer any more flights between San Francisco and Fiji. Only tourist-class seats are available on its planes. An analyst has collected the following information: Seating capacity per plane 380 passengers Average number of passengers per flight 175 passengers Flights per week 4 flights Flights per year 208 flights Average one-way fare $325 Variable fuel costs $14,000 per flight Food and beverage service costs/passenger $4 per Commission to travel agents paid by Air Frisco 10% of fare (all tickets are booked by travel agents) Fixed annual lease costs allocated to each flight $53,000 per flight Fixed ground services (maintenance, check in, baggage handling) costs allocated to each flight $7,500 per flight Fixed flight crew salaries allocated to each flight $7,000 per flight 1. Calculate the operating income that Westcoast Air earns on each one-way flight between San Francisco and Fiji. The operating income would be the difference between the revenues and the expenses (costs) and is calculated below, per flight: Average number of passengers per flight
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Case Assignment 5 Principles of Accounting - TUI UNIVERSITY...

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