Break-even sales and sales mix for a service companyZero Turbulence Airline provides air transportation services betweenLos Angeles, California; and Kona, Hawaii. A single Los Angeles to Konaround-trip flight has the following 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 arefixed, 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 overallproduct mix is 10% business class and 90% economy class tickets.b. How many business class and economy class seats would besold at the break-even point?
Break-even sales and sales mix for a service companyZero Turbulence Airline provides air transportation services betweenLos Angeles, California; and Kona, Hawaii. A single Los Angeles to Konaround-trip flight has the following 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 arefixed, 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 overallproduct mix is 10% business class and 90% economy class tickets.b. How many business class and economy class seats would besold at the break-even point?
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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Question
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 | $7,000 |
| Flight crew salaries | 3,200 |
| Airplane |
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?
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