
Respuesta :
Answer:
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 10% business class and 90% economy class tickets.
- 90 tickets
b. How many business class and economy class seats would be sold at the break-even point?
- business class = 9 tickets
- economy class = 81 tickets
Explanation:
Fixed costs:
- Fuel $11,506
- Flight crew salaries $8,813
- Airplane depreciation $4,161
- Total $24,480
Variable costs:
- Variable cost per passenger - business class 45
- Variable cost per passenger - economy class 35
Contribution margin:
- Business class ticket = $515 - $45 = $470
- Economy class ticket = $285 - $55 = $250
Weighted average contribution margin:
- (10% x $470) + (90% x $250) = $272
break even point in units = $24,480 / $272 = 90 seats
business class = 90 x 10% = 9 seats
economy class = 90 x 90% = 81 seats