If There Are Open First-Class Seats Available on a Particular

question 35

Multiple Choice

If there are open first-class seats available on a particular flight, some airlines allow customers with coach (discount) tickets to upgrade to first-class tickets during the electronic check-in process. Suppose the regular price of a first-class ticket is $800, the total price of the upgrade ticket (original price plus the upgrade) is $400, the marginal cost of serving both types of customers (full-fare and upgrade first-class flyers) is $100, and the airline maximizes profits. Which of the following statements is true?

• A) MR for the full-fare customers must be higher than the MR from upgrade customers.
• B) MR for the full-fare customers may be higher or lower than the MR from upgrades.
• C) MR = MC for the full-fare customers, but the airline is willing to collect any positive amount from the upgrade customers.
• D) MR must be the same for both full-fare and upgrade customers.

Comprehend the significance and calculation of the current ratio as a measure of a company's financial liquidity.

Learn the sequence of steps in the accounting cycle, from journalizing transactions to the preparation of the post-closing trial balance.

Understand the function and use of the Income Summary account during the closing process.

Grasp the concept and necessity of adjusting entries in the preparation of accurate financial statements.

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