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
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 $10,199 Flight crew salaries 7,812 Airplane depreciation 3,689 Variable cost per passengerbusiness class 50 Variable cost per passengereconomy class 40 Round-trip ticket pricebusiness class 560 Round-trip ticket priceeconomy class 300 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.
a. Compute the break-even number of seats sold on a single round-trip flight for the overall enterprise product, E. Assume that the overall product mix is 20% business class and 80% economy class tickets. 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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