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Break-even sales and sales mix for a service company Zero Turbulence Airline provides...

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Accounting

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
Flight crew salaries
Airplane depreciation
Variable cost per passenger-business class
$9,344
7,157
3,379
Variable cost per passenger-economy class
65
Round-trip ticket price-business class
50
Round-trip ticket price-economy class
605
270
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 company product, M. Assume that the overall product mix is 20% business class and 80% 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
image

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