Break-Even Sales and Sales Mix for a Service Company Zero Turbulence Airline provides air transportation...
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Accounting
Break-Even Sales and Sales Mix for a Service Company
Zero Turbulence Airline provides air transportation services between Los Angeles, California; and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the following operating statistics:
Fuel $8,258
Flight crew salaries 6,325
Airplane depreciation 2,987
Variable cost per passengerbusiness class 40
Variable cost per passengereconomy class 30
Round-trip ticket pricebusiness class 570
Round-trip ticket priceeconomy class 250
It is assumed that the fuel, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight. If required round the answers to nearest whole number.
a. Compute the break-even number of seats sold on a single round-trip flight for the overall product, E. Assume that the overall product is 10% business class and 90% economy class seats. Total number of seats at break-even?
b. How many business class and economy class seats would be sold at the break-even point?
Business class seats at break-even?
Economy class seats at break-even?
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