Question

"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 $15,961 Flight crew salaries 12,226 Airplane depreciation 5,773 Variable cost per passenger—business class 60 Variable cost per passenger—economy class 50 Round-trip ticket price—business class 550 Round-trip ticket price—economy class 310"

Answer 1

Answer:

Explanation:

To Determine

(a) Break-even Point in Sales (units) = Fixed Costs / Contribution Margin

Fixed Cost =(15,961 + 12,226 + 5773) = $33,960

Contribution Margin  per unit = $228

$33,960/$228

=140 seats

selling price per unit product = (550 per seat X 10%) + (310 per seat X 90%)

= 55 + 279

=334