1. Zero Turbulence Airline provides air transportation servicesbetween Los Angeles, California; and Kona, Hawaii. A single LosAngeles to Kona round-trip flight has the following operatingstatistics: Fuel $14,062 Flight crew salaries 10,771 Airplanedepreciation 5,087 Variable cost per passenger—business class 50Variable cost per passenger—economy class 40 Round-trip ticketprice—business class 530 Round-trip ticket price—economy class 260It is assumed that the fuel, crew salaries, and airplanedepreciation are fixed, regardless of the number of seats sold forthe round-trip flight. If required round the answers to nearestwhole number. a. Compute the break-even number of seats sold on asingle round-trip flight for the overall product, E. Assume thatthe overall product is 20% business class and 80% economy classseats. Total number of seats at break-even seats b. How manybusiness class and economy class seats would be sold at thebreak-even point? Business class seats at break-even seats Economyclass seats at break-even seats
2. For a recent year, Wicker Company-owned restaurants had thefollowing sales and expenses (in millions):
Sales | $22,000 |
Food and packaging | $8,180 |
Payroll | 5,500 |
Occupancy (rent, depreciation, etc.) | 4,460 |
General, selling, and administrative expenses | 3,200 |
| $21,340 |
Income from operations | $660 |
Assume that the variable costs consist of food and packaging,payroll, and 40% of the general, selling, and administrativeexpenses.
a. What is Wicker Company's contributionmargin? Round to the nearest million. (Give answer in millions ofdollars.)
$ million
b. What is Wicker Company's contribution marginratio? Round to one decimal place.
%
c. How much would income from operationsincrease if same-store sales increased by $1,300 million for thecoming year, with no change in the contribution margin ratio orfixed costs? Round your answer to the closest million.
$ million