1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
labwork [276]
3 years ago
12

Zero Turbulence Airline provides air transportation services between Los Angeles, California; and Kona, Hawaii. A single Los Ang

eles to Kona round-trip flight has the following operating statistics:
Fuel $11,506
Flight crew salaries 8,813
Airplane depreciation 4,161
Variable cost per passenger—business class 45
Variable cost per passenger—economy class 35
Round-trip ticket price—business class 515
Round-trip ticket price—economy class 285

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. If required round the answers to nearest whole number.

Required:
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.
b. How many business class and economy class seats would be sold at the break-even point?
Business
1 answer:
tankabanditka [31]3 years ago
7 0

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

You might be interested in
In the models that describe population growth, r stands for __________.in the models that describe population growth, r stands f
Julli [10]
<span>In the models that describe population growth, R stands for per capita population growth rate. The per capital growth rate is determined by the number of births and deaths within a city, state or country. In the models, the R will represented these numbers. </span>
4 0
4 years ago
Which of the following is not a potential pitfall of a differentiation strategy?
goldfiish [28.3K]

Answer: Option B

     

Explanation: Differentiation strategy refers to the strategy in which a firm tries to differentiate itself from the market by developing a unique product that has never been introduced before. It is done with the objective of gaining competitive advantage by starting one's own market base.

However, this has a major pitfall as the product that the consumers might not find that product valuable as much or the production cost would be too high that it lead to premium pricing.

Hence from the above we can conclude that the correct option is B.

8 0
3 years ago
If all other factors are equal, what will happen to the supply of a product if the price goes up? A. The supply will increase. B
Vinil7 [7]
The basic principle is that if the price of a product goes up, all other factors being equal its demand will go down and vice versa (law of demand). Since in this case the price goes up, the demand will go down. The law of supply states that hen prices rise, supply rises too (in order to make profit). There is no general model predicting whether the market will be more competitive or not. Thus, the best answer from the above is A.
5 0
3 years ago
Q1. SISKO &amp; Co. Ltd commences business and issues one million shares with a nominal value of Le3 each. The company allows it
Artyom0805 [142]

Answer:

SISKO & Co. Ltd.

1. The paid-up share capital is:

A. Le1.25 million

2. Current Ratio will be:

(B) 3:1

Explanation:

a) Data and Calculations:

Issued share capital = 1,000,000 shares

Allotment = Le1.25 per share

Paid-up share capital = Le1.25 million (Le1.25 * 1,000,000)

Current Ratio:

Cash Balance                  Le15,000

Trade Receivables         Le35,000

Inventory                        Le40,000

Total current assets      Le90,000

Current liabilities:

Trade Payables             Le24,000

Bank Overdraft               Le6,000

Total current liabilities Le30,000

Current ratio = Current assets/Current liabilities

= Le90,000/Le30,000

= 3:1

8 0
3 years ago
Emergency funds are important because they ____________.
WITCHER [35]

Emergency funds are important because they B. are available when they are most needed, such as after a job loss. Emergency funds that are funds set aside for an emergency, out of the options above, this is when they are most needed. It is important to have an emergency fund set up because you can not prepare for what may happen and when, but having the funds prepared incase something does allows for much less stress.

4 0
3 years ago
Read 2 more answers
Other questions:
  • The value today of the following cash flows is $6,423.71 at an interest rate of 5.8 percent. What is the value of the Year 3 cas
    10·1 answer
  • If a company is concerned about lending money to a risky customer, which one of the following would it not want to do? Require t
    10·1 answer
  • What takes place during pre-planning
    15·1 answer
  • Keyser Beverage Company reported the following items in the most recent year.
    13·1 answer
  • The following cost data for the month of May were taken from the records of the Terrence Manufacturing Company: (CIA adapted) De
    14·1 answer
  • " The high cost of implementing changes to infrastructure always raises questions about priorities. Should investments in infras
    12·1 answer
  • May decides to start a new clothing company. she is targeting those customers who want to be fashionable and trendy, yet differe
    13·1 answer
  • _____ occurs when an individual or business capitalizes on a price differential for a firm’s product between two countries by bu
    9·1 answer
  • Marco is a marketing manager for Securities Services. He has been looking at a variety of factors, such as technological, socioc
    10·1 answer
  • You need to decide whether to fight a small fire using a portable fire extinguisher.
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!