Reference no: EM132881688
Problem - Break-even sales and sales mix for a service company - Sunshine Airways provides air transportation services between Philadelphia and Orlando. A single Philadelphia to Orlando round-trip flight has the following operating statistics:
Fuel $8,200
Flight crew salaries 3,700
Airplane depreciation 3,450
Variable cost per passenger-business class 100
Variable cost per passenger-economy class 75
Round-trip ticket price-business class 600
Round-trip ticket price-economy class 190
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 over-all product. Assume that the overall product is 10% business class and 90% economy class tickets.
b. How many business class and economy class seats would be sold at the break-even point?
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