service Break-Even Sales and Sales Mix for a Service Company Zero Turbulence Air

Question

service Break-Even Sales and Sales Mix for a Service Company Zero Turbulence Airline provides alr transportation services between Los Angeles, Californla; and Kona, Hawall. A single Los Angeles to Kona round-trip flight has the following operating statistics Fuel Flight crew salarles Alrplane depreciation Varlable cost per passenger-business class Varlable cost per passenger-economy class Round-trip ticket price-business class Round-trip ticket price-economy class It Is assumed that the fuel, crew salarles, and alrplane depreclation 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 fight for the overall product, E Assume that the overall product ls 10% business class and 90 economy class seats. Total number of seats at break-even b. How many business class and economy class seats would be sold at the break-even polnt? Business class seats at break-evern Economy class seats at break-evern $11,379 8,716 4,115 45 35 575 275 seats seats seats

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. a. Weighted SP Weighted VC Weight Sale Price Variable Cost Business Class 10 575 57.5 45 4.5 Economy Class 90 275 247.5 35 31.5 Total 100 305 36 Unit Selling Price of E 305 Unit Variable Cost of E 36 Unit Contribution of E 269 Fixed Cost: Fuel 11379 Flight Crew Salaries 8716 Dep 4115 Total FC 24210 BEP=FC/Unit Cont 24210/269 90 b. Business Class 90*10% 9 Economy Class 90*90% 81

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