Frightproof commuter airlines is considering adding a new flight to its current schedule from metro to hicksville. this route has the following prices and costs. selling price per passenger per flight $ 70 variable cost per passenger per flight $ 20 fixed cost per flight $ 4,400 income tax rate 30 % required: a. compute frightproof's break-even point in number of passengers per flight. b. how many passengers per flight must frightproof have to earn $1,750 per flight after taxes?

Instructions are listed below

Explanation:

Giving the following information:

Selling price per passenger per flight $ 70

Variable cost per passenger per flight $ 20

Fixed cost per flight $ 4,400

Income tax rate of 30 %

1) Break-even point= fixed costs/ controbution margin

Break-even point= 4400/(70-20)= 88 passengers

2) Break-even points= {[Fixed costs + [net profit/(1-t)]}/contribution margin

Break-even points= [4400 + (1750/0.70)]/50= 138 passengers

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