Reference no: EM132754891

Question: 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 $16,751 Flight crew salaries 12,830 Airplane depreciation 6,059 Variable cost per passenger-business class 40 Variable cost per passenger-economy class 30 Round-trip ticket price-business class 580 Round-trip ticket price-economy 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. If required round the answers to nearest whole number.

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 10% business class and 90% economy class seats.

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