Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 19 Aug 2017 My Price 9.00

Zero Turbulence Airline

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 fol- lowing  operating statistics:

 

 

Fuel

$7,000

Flight crew salaries

3,200

Airplane depreciation

3,480

Variable cost per passenger—business class

140

Variable cost per passenger—economy class

120

Round-trip ticket price—business class

800

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.

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 mix 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?

Answers

Maurice Tutor
(5)
Status NEW Posted 19 Aug 2017 11:08 PM My Price 9.00

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