Estimate the cost of a flight for a single passenger.


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Do you agree or disagree? Explain your reasoning. I do not agree with the with the equation given by the example provided. In the example provided the cost per seat-mile was multiplied by 1,184 miles which is incorrect. The reason this calculation is incorrect is that the total operating expenses were not properly taken into account. What would you suggest to estimate the cost of a flight? To correct the equation above that I would suggest that we follow the formula for determining the cost of a flight, which is the total operating expense multiplied by the distance of the flight in miles. In the example given we know that the cost per seat mile is 24.1 cents. This figure of 24.1 cents takes into account total operating expenses but needs to be converted into a percentage before it is multiplied by 1184 miles. This percentage would be 24.1% or .241 which is to be multiplied by 1,184 miles. The product and final solution we arrive to is $285.34 per passenger. This would be the proper way to estimate the cost of a flight for a single passenger.

 

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Cost Accounting: Estimate the cost of a flight for a single passenger.
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