i Requirement Calculate the number of tickets Sunset must sell each month to (a) break...

90.2K

Verified Solution

Question

Accounting

imageimageimage

i Requirement Calculate the number of tickets Sunset must sell each month to (a) break even and (b) make a target operating income of $14,000 per month in each of the following independent cases. (Round up to the nearest whole number. For example, 10.2 should be rounded up to 11.) 1. Sunset's variable costs are $36 per ticket. Ottawa Air pays Sunset 6% commission on ticket price. 2. Sunset's variable costs are $28 per ticket. Ottawa Air pays Sunset 6% commission on ticket price. 3. Sunset's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Sunset. Comment on the results. 4. Sunset's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Comment on the results. Print Done Sunset Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Sunset's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven number of units = Fixed costs Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold =( Now complete the requirement for each of the cases. Begin with case 1. Case 1: Sunset's variable costs are $36 per ticket. Ottawa Air pays Sunset 6% commission on ticket price. Sunset must sell tickets to break even and tickets to meet the target operating income. Case 2: Sunset's variable costs are $28 per ticket. Ottawa Air pays Sunset 6% commission on ticket price. Sunset must sell L t ickets to break even and tickets to meet the target operating income. Case 3: Sunset's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Sunset. Comment on the results. Sunset must sell tickets to break even and tickets to meet the target operating income. When comparing Case 3 to Case 2, the commission sizably the breakeven point and the number of tickets required to yield a target operating income of $14,000. Case 4: Sunset's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket Comment on the results. Sunset must sell tickets to break even and tickets to meet the target operating income. When comparing Case 4 to Case 3, the $6 delivery fee results in a contribution margin which both the breakeven point and the number of tickets sold to attain operating income of $14,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students