Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 Flight crew salaries Airplane depreciation Variable cost per passenger-business class Variable cost per passenger-economy class Round-trip ticket price-business class Round-trip ticket price-economy class $4,606 3,528 1,666 60 50 530 270 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 10% business class and 90% economy class tickets. * Total number of seats at break-even 9,800 seats b. How many business class and economy class seats would be sold at the break-even point? Business class seats at break-even Economy class seats at break-even seats seats Feedback Check My Work a. Subtract the combined unit variable cost from the combined unit selling price. Divide the fixed costs by the combined unit contribution margin to obtain total break-even units. b. Multiply the break-even units by the percentage of each component.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started