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Case Study Boeing Airline

In: Business and Management

Submitted By thagirshan
Words 547
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Question 1
Annual fixed cost: $950 million
Variable cost per plane: $45 million
Q1
Break-even point in unit= $950 million $25 million
Break-even point in unit= 38 units
Break-even point in sale dollars= $950 million $25 million $70 million
Break-even point in sale dollars= $950 million 0.357
Break-even point in sale dollars= $ 2660 Million

Q2

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Revenue for 42 airline= $70 million * 42 airlines
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Total = $2940 million

Sale revenue – Variable expense – Fixed expense = Profit
$2940 million- $45 million - $950 million= $100 million

PROFIT = $100 million

Q3

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Fixed cost
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New fixed cost = $950 million + $84 million
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Total New fixed cost= 1034 million
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Variable cost
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New Variable cost = 45 million – $2 million
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Total new variable cost= $43 million

a)
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Sale= $2940 million
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Variable expense= $1806 million
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Fixed expense = $1034 million Profit= $2940 million- $1806 million - $1034 Million
Total profit = $ 100 million

b) Break-even point in unit= $1034 million $27 million
Break-even point in unit= 38 units

c) Comment on your results (can u please answer this question)
Q4
I. Ignore requirement # 3. Suppose fixed costs do not change but variable costs increase by…...

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