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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

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 $9,311
Flight crew salaries 7,132
Airplane depreciation 3,367
Variable cost per passengerbusiness class 50
Variable cost per passengereconomy class 40
Round-trip ticket pricebusiness class 540
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 10% business class and 90% 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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