RELEVANT COSTING PROBLEMS CASE Relevant Costing Problems Case

Relevant Costing Problems Case: Westcost Air Company

Requirement 1

Seating capacity

380

Per flight passenger

175

Flights per week

4

Flights per year

208

One way fare

$ 11,830,000

Less: Expenses

Fuel cost

$ 2,912,000

Food and beverages

$ 145,600

Commission

$ 1,183,000

Fixed ground services

$ 1,560,000

Fixed flight crew salary

$ 1,456,000 $ 7,256,600

Operating Profit

$ 4,573,400

Following is the definition of the Operating Income

Operating Income: Operating income is obtained by subtracting from gross income the operating expenses. Operating Income is a term used in the area of accounting, auditing and financial ...