Break-Even Sales and Sales Mix for a Service CompanyZero Turbulence Airline provides air transportation services between Los Angeles,, California; and Kona, Hawaii. A single Los Angeles to Kona round-trip flight has the followingoperating statistics:Fuel$6,956Flight crew salaries5,328Airplane depreciation2,516Variable cost per passenger-business class55Variable cost per passenger-economy class45Round-trip ticket price-business class585Round-trip ticket price-economy class315It 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 tonearest 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-evenseatsb. How many business class and economy class seats would be sold at the break-even point?Business class seats at break-evenseatsEconomy class seats at break-evenseatsCheck My Work2 more Check My Work uses remaining.PreviousNext

a.Compute the break-even number of seats sold on a single round-trip flight for the overall Product…

Answered: Break-Even Sales and Sales Mix for a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Territory and Product Profitability Analysis Pipeline Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboards are sold in two regions, East Coast and West Coast. Information about the two surfboards is as follows: Atlantic Wave Pacific Pounder Sales price Variable cost of goods sold per unit Manufacturing margin per unit Variable selling expense per unit Contribution margin per unit $250 $200 (93) (92) $157 $108 (112) $45 (52) $56 The sales unit volume for the sales territories and products for the period is as follows: East Coast West Coast Atlantic Wave Pacific Pounder 2,860 0 1,430 1,430 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory. Round contribution margin ratio answers to two decimal places. Pipeline Surfboards Inc. Contribution Margin by Territory Line Item Description Sales East Coast West Coast 715,000 Variable cost of goods sold Manufacturing…
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 $14,373 Flight crew salaries 11,009 Airplane depreciation 5,198 Variable cost per passenger—business class 70 Variable cost per passenger—economy class 55 Round-trip ticket price—business class 540 Round-trip ticket price—economy class 285 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 20% business class and 80% economy class seats. Total number of seats at break-even fill in the blank 1 seats b. How many business…
eBook Break-Even Sales and Sales Mix for a Service Company Yellow Dove Airways provides air transportation services between Portland and Minneapolis. A single Portland to Minneapolis round-trip flight has the following operating statistics: Fuel and landing fees $10,331 Flight crew salaries 7,913 Airplane depreciation 3,736 Variable cost per passenger-business class 60 Variable cost per passenger-economy class 50 Round-trip ticket price-business class 590 Round-trip ticket price-economy class 310 It is assumed that the fuel and landing fees, 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. Assume that the overall product is 20% business class and 80% economy class tickets. Round your answer to whole number. Total number of seats at break-even seats b. How many business class and economy class seats would be sold at…
The following data are for Greasy Gary's Grubhouse: West East Sales volume (units): Hub Cap 14,000 9,000 Gas Can 6,500 18,000 Sales price per unit: Hub Cap $36 $28 Gas Can $22 $31 The variable cost of goods sold per unit Hub Cap $19 $17 Gas Can $9 $14 Variable selling and administrative per unit Hub Cap $ 5 $ 4 Gas Can $ 3 $2 (a) Complete a contribution margin by sales territory and by-product (b) Analyze the statements and comment on what can help the company in terms of profitability, product placement, and territory. List 3 pros and cons to each product and territory.
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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 Variable cost per passenger-economy class $8,065 6,178 2,917 55 45 Round-trip ticket price-business class 525 285 Round-trip ticket price-economy class 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…
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Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows: Line Item Description Torch Elk Walloon Total Sales revenue $1,280 $185 $315 $1,780 Less: Variable expenses 1,115 45 252 1,412 Contribution margin $165 $140 $63 $368 Less direct fixed expenses: Depreciation 50 15 10 75 Advertising 95 85 76 256 Segment margin $20 $40 $(23) $37 Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that, each of the three products has a different marketing campaign whose advertising would be eliminated if the associated product were dropped. Assume that 30% of the Torch customers choose to buy from Charlevoix because it offers a full range of products, including Walloon. If Walloon were no longer available from Charlevoix, these customers…
Part C please WSM Corporation
Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Boyne Conway $270 Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Depreciation Salaries Alanson $1,280 $185 1,115 $165 50 95 $20 45 $140 15 85 $40 216 $54 12 100 $(58) Total $1,735 1,376 $359 77 280 $2 Segment margin Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped. Required: Conceptual Connection: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15".
Eliminate an Unprofitable Segment Cloud busters Aircraft Inc. makes a variety of small airplanes for business and personal use” The Spitfire, the Lightning Bolt, and the Aerobatic. Lately business has been very slow and the Aerobatic has become unprofitable. Consider the income statement data as follows: Spitfire Lightning Bolt Aerobat Total Sales $9,000,000 $8,000,000 $3,500,000 $20,500,000 Variable Expenses 6,200,000 4,200,000 2,600,000 $13,000,000 Contribution Margin 2,800,000 3,800,000 900,000 $7,500,000 Fixed Expenses 1,100,000 1,250,000 1,150,000 $3,500,000 Net Income $1,700,000 $2,550,000 ($250,000) $4,000,000 Additional Fixed Exp. Adjusted Net Income If the Aerobat is eliminated, the fixed expenses will be allocated to the Spitfire and Lightning Bolt at 45% and 55% respectively. Should the company continue to make the…

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