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.
b. How many business class and economy class seats would be sold at the break-even point?
Explanation:
Fixed costs:
Variable costs:
Contribution margin:
Weighted average contribution margin:
break even point in units = $24,480 / $272 = 90 seats
business class = 90 x 10% = 9 seats
economy class = 90 x 90% = 81 seats