Blue Skies Airline provides passenger airline service, using small jets. The airline connects four major cities: Atlanta, Cincinnati, Chicago, and Los Angeles. The company expects to fly 140,000 miles during a month. The following costs are budgeted for a month:
Fuel...................................................$1,450,000
Ground personnel...............................693,250
Crew salaries........................................710,000
Depreciation.........................................360,000
                                                               _________
Total costs........................................$3,213,250
                                                               _________
Blue Skies management wishes to assign these costs to individual flights in order to gauge the profitability of its service offerings. The following activity bases were identified with the budgeted costs:

The size of the company€™s ground operation in each city is determined by the size of the workforce. The following monthly data are available from corporate records for each terminal operation:

Three recent representative flights have been selected for the profitability study. Their characteristics are as follows:

1. Determine the fuel, crew, and depreciation cost per mile flown.
2. Determine the cost per arrival or departure by terminal city.
3. Use the information in (1) and (2) to construct a profitability report for the three flights. Each flight has a single arrival and departure to its origin and destination city pairs.
4. Evaluate flight profitability by determining the break-even number of passengers required for each flight assuming all the costs of a flight are fixed. Round to the nearest whole number.

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Airline Cost Activity Base Fuel, crew, and depreciation costs Ground personnel Number of miles flown Number of arrivals and departures at an airport Terminal City Ground Personnel Cost Number of Arrivals/Departures Atlanta Cincinnati Chicago $224,750 84,000 114,800 290 120 140 310 Los Angeles Total 269,700 $693,250 860