1. 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