Click to watch the Concept Clip Airline Industry Breakeven video and then answer the questions below. 1. Airlines measure revenues and cost by a. fuel used b. number of passengers per flight. c. miles logged d. available seat miles. 2. RASM is the average a. miles logged b. runway area in miles. c. revenue earned per available seat mile. d. cost per available seat mile. 3. CASM is the average a. revenue earned per available seat mile. b. cost per available seat mile. c. cash available for seat maintenance. d. customer availability for seasonal miles. 4. This is measured by the average proportion of seats filled across all flights. a. Load factor b. CASM c. RASM d. Break-even point Classify Costs Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as variable, fixed, or mixed. 1. Cost of labor for hourly workers 2. Factory cleaning costs, $6,000 per month 3. Hourly wages of machine operators 4. Computer chip (purchased from a vendor) 5. Electricity costs, $0.20 per kilowatt-hour 6. Metal 7. Salary of plant manager 8. Property taxes, $165,000 per year on factory building and equipment 9. Plastic 10. Oil used in manufacturing equipment 11. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 12. Property insurance premiums, $3,600 per month plus $0.01 for each dollar of property over $1,200,000 13. Straight-line depreciation on the production equipment 14. Pension cost, $1.00 per employee hour on the job 15. Packaging Break-Even Sales and Sales Mix for a Service Company Zero Turbulence Airline provides air transportation services between Los Angeles, California, and Kona, Hawai. A single Los Angeles to Kona round-trip flight has the following operating statistics: $7,000 3,200 3,480 140 120 800 300 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 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 mix is 10% business class and 90% economy class tickets. Total number of seats at break-even 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 seats