Subject: Business / Accounting
QuestionBreak-Even Sales and Sales Mix for a Service CompanyNorthern Green Airways provides air transportation services between Seattle and San Diego. A single Seattle to San Diego round-trip flight has the following operating statistics:
Flight crew salaries 7,661
Airplane depreciation 3,617
Variable cost per passenger—business class 65
Variable cost per passenger—economy class 50
Round-trip ticket price—business class 565
Round-trip ticket price—economy class 290It 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 is 10% business class and 90% economy class seats.
Total number of seats at break-even seatsb. How many business class and economy class seats would be sold at the break-even point?
Business class seats at break-even seats
Economy class seats at break-evenseats