Break-Even Sales and The relative distribution of sales among the various products available for sale.Sales Mix for a Service Company

Northern Green Airways provides air transportation services between Seattle and San Diego. A single Seattle to San Diego round-trip flight has the following operating statistics:

Fuel	$7,426
Flight crew salaries	5,688
Airplane depreciation	2,686
Variable cost per passengerbusiness class	50
Variable cost per passengereconomy class	40
Round-trip ticket pricebusiness class	590
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 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 The level of business operations at which revenues and expired costs are equal.break-even point?

Business class seats at break-even	seats
Economy class seats at break-even	seats