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Break-Even Sales and Sales Mix for a Service Company Yellow Dove Airways provides air transportation services between Portland and Minneapolis. A single Portland to Minneapolis
Break-Even Sales and Sales Mix for a Service Company Yellow Dove Airways provides air transportation services between Portland and Minneapolis. A single Portland to Minneapolis round-trip flight has the following operating statistics: Fuel and landing fees $9,409 Flight crew salaries 7,207 Airplane depreciation 3,404 Variable cost per passenger-business class 70 Variable cost per passenger-economy class 55 Round-trip ticket price-business class 540 Round-trip ticket price-economy class 295 It is assumed that the fuel and landing fees, crew salaries, and airplane depreciation are fixed, regardless of the number of seats sold for the round-trip flight. a. Compute the break-even number of seats sold on a single round-trip flight for the overall product. Assume that the overall product is 20% business class and 80% economy class tickets. Round your answer to whole number. Total number of seats at break-even seats b. How many business class and economy class seats would be sold at the break-even point? Round your answers to whole number. Business class seats Economy class seats
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