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 $7,050 Flight crew salaries 5,400 Airplane depreciation 2,550 Variable cost per passenger—business class 70 Variable cost per passenger—economy class 55 Round-trip ticket price—business class 610 Round-trip ticket price—economy class 295 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 fill in the blank 1 seats b. How many business class and economy class seats would be sold at the break-even point? Round your answers to whole number. Business class fill in the blank 2 seats Economy class fill in the blank 3 seats
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 $7,050 Flight crew salaries 5,400 Airplane depreciation 2,550 Variable cost per passenger—business class 70 Variable cost per passenger—economy class 55 Round-trip ticket price—business class 610 Round-trip ticket price—economy class 295 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 fill in the blank 1 seats b. How many business class and economy class seats would be sold at the break-even point? Round your answers to whole number. Business class fill in the blank 2 seats Economy class fill in the blank 3 seats
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 22E
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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 | $7,050 |
| Flight crew salaries | 5,400 |
| Airplane |
2,550 |
| Variable cost per passenger—business class | 70 |
| Variable cost per passenger—economy class | 55 |
| Round-trip ticket price—business class | 610 |
| Round-trip ticket price—economy class | 295 |
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 | fill in the blank 1 seats |
b. How many business class and economy class seats would be sold at the break-even point? Round your answers to whole number.
| Business class | fill in the blank 2 seats |
| Economy class | fill in the blank 3 seats |
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