Question

1. 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 $14,062 Flight crew salaries 10,771 Airplane depreciation 5,087 Variable cost per passenger—business class 50 Variable cost per passenger—economy class 40 Round-trip ticket price—business class 530 Round-trip ticket price—economy class 260 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. 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. Total number of seats at break-even seats b. How many business class and economy class seats would be sold at the break-even point? Business class seats at break-even seats Economy class seats at break-even seats

2. For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions):

Sales	$22,000
Food and packaging	$8,180
Payroll	5,500
Occupancy (rent, depreciation, etc.)	4,460
General, selling, and administrative expenses	3,200
	$21,340
Income from operations	$660

Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.

a. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)
$ million

b. What is Wicker Company's contribution margin ratio? Round to one decimal place.
%

c. How much would income from operations increase if same-store sales increased by $1,300 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$ million

Answer 1

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