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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 $11,844 Flight crew salaries 9,072 Airplane depreciation 4,284 Variable cost per passenger—business class 45 Variable cost per passenger—economy class 35 Round-trip ticket price—business class 525 Round-trip ticket price—economy class 265 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 break-even point? Round your answers to whole number. Business class              seats Economy class              seats

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 $11,844 Flight crew salaries 9,072 Airplane depreciation 4,284 Variable cost per passenger—business class 45 Variable cost per passenger—economy class 35 Round-trip ticket price—business class 525 Round-trip ticket price—economy class 265 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 break-even point? Round your answers to whole number. Business class              seats Economy class              seats

Managerial Accounting
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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  1. 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 $11,844
    Flight crew salaries 9,072
    Airplane depreciation 4,284
    Variable cost per passenger—business class 45
    Variable cost per passenger—economy class 35
    Round-trip ticket price—business class 525
    Round-trip ticket price—economy class 265

    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 break-even point? Round your answers to whole number.

    Business class              seats
    Economy class              seats
 
 

 

 

   
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