Question
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
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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 $11,054 Flight crew salaries 8,467 Airplane depreciation 3,999 Variable cost per passengerbusiness class 70 Variable cost per passengereconomy class 55 Round-trip ticket pricebusiness class 540 Round-trip ticket priceeconomy class 305 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 20% business class and 80% economy class seats.
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?
Business class seats at break-even seats Economy class seats at break-even seats
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