e cost per passenger—economy class 45 Round-trip ticket price—business class 565 Round-trip ticket price—economy class 305
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:
| Line Item Description | Amount |
|---|---|
| Fuel | $6,698 |
| Flight crew salaries | 5,130 |
| Airplane |
2,422 |
| Variable cost per passenger—business class | 55 |
| Variable cost per passenger—economy class | 45 |
| Round-trip ticket price—business class | 565 |
| Round-trip ticket price—economy class | 305 |
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 10% business class and 90% economy class tickets.
Total number of seats at break-even fill in the blank 1 of 1 seats
b. How many business class and economy class seats would be sold at the break-even point?
Business class seats at break-even fill in the blank 1 of 2 seats
Economy class seats at break-even fill in the blank 2 of 2 seats
Breakeven point is the point where total cost and revenue are same resulting in no profit or loss . It is the point where contrinution margin and fixed cost are equal
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