At the time of writing, Burt Rutan and Sir Richard Branson had teamed up to form The Spaceship Company, which wilt develop and manufacture commercial spacecraft (SpaceShipTwo, or SS2), launch aircraft (WhiteKnightTwo, or WK2), and support equipment. Bransons "spaceline," Virgin Galactic, will handle the operations for space tourist flights. Their hope is to eventually reduce by half the proposed initial ticket price of $190,000.

No information has been released about development and operating costs for the spaceline and equipment, so the figures used in this case are guesses. Refer to Example 9.7 for hypothetical lifecycle costs for the spaceline and spaceship fleet but assume the following changes to the numbers:

Five spaceships, seven passengers per spaceship.

Development and manufacturing costs, $120 million.

Flight operations cost: $0.5 million/flight.

Ticket price: $190,000 for passengers on the first 100 flights, then $150,000 for passengers on the next 100, and $100,000 for passengers on flights thereafter.

If the profit goal is $70 million,

a. What is the maximum development and production cost for the fleet?

b. What is the maximum per-flight operational cost (note: assume $120 million development/production cost)?