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	$8,949
Flight crew salaries	6,854
Airplane depreciation	3,237
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.

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

fill in the blank 1 seats

b. How many business class and economy class seats would be sold at the break-even point?

Business class seats at break-even	fill in the blank 2 seats
Economy class seats at break-even	fill in the blank 3 seats