The reason that the elasticity of demand is 0.62 for business and 0.12 for economy is because the economy class is more elastic than that of the business.
When the flight ticket of those flying business class is raised, they would not be affected much because they are rich and can afford it. They do not care much about the raise in price.
For the average flyer using the economy flight, raising the price of the ticket would affect him and he may end up reducing his demand for it.
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Answer:
$2,553,191
Explanation:
The formula to compute the break even point in dollars amount is presented below:
= (Fixed cost ) ÷ (Profit volume ratio)
where,
Fixed cost = $300,000
And the profit volume ratio would be
= (Contribution margin) ÷ (Sales) × 100
We assume the sales be 100%
So, the variable cost is
= 88.25%
And, the contribution margin is
= 100 - 88.25
= 11.75%
So, the break even sales would be
= $300,000 ÷ 11.75%
= $2,553,191
Answer:
Callous
Explanation:
Showing the counters of tuition $200 per credit.
Answer:
The total cost of Job 903 is $5,073.20
Explanation:
The computation of the total cost is shown below:
= Direct material used + Direct labor cost + overhead cost (Predetermined manufacturing overhead rate per direct labor hour × Direct labor hours used in Job 903)
= $3,200 + $1,092 + ($18.60 × 42 labor hours)
= $3,200 + $1,092 + $781.20
= $5,073.20
