Managerial Accounting: E4-22 Latitude and Attitude Airlines provides air transportation

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Managerial Accounting

E4-22 Break-Even Sales and Sales Mix for a Service Company
Latitude and Attitude Airlines provides air transportation services between New York City and George Town, Grand Cayman. A single New York to George Town, Grand Cayman round-trip flight has the following operating statistics:
Fuel 10,400
Flight crew salaries 4,300
Airplane depreciation 10,500
Variable cost per passenger—business class 100
Variable cost per passenger—economy class 75
Round-trip ticket price—business class 1,000
Round-trip ticket price—economy class 200

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 is 20% business class and 80% economy class seats.
b. How many business class and economy class seats would be sold at the break-even point?
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