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	$19,400
Flight crew salaries	3,760
Airplane depreciation	2,600
Variable cost per passengerbusiness class	50
Variable cost per passengereconomy class	20
Round-trip ticket pricebusiness class	750
Round-trip ticket priceeconomy class	300

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 10% business class and 90% 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