P22-5A Pacific Paradise Travel is opening an office in Seattle. Fixed monthly expenses are office rent ($3.700). depreciation on office furniture ($300), utilities ($210), a special tele- phone line ($650), a connection with the airlines computerized reservation service ($480). and the salary of a travel agent ($2,500). Variable expenses include commissions for the travel agent (7% of sales), advertising (8% of sales), supplies and postage (2% of sales), and usage fees for the telephone line and computerized reservation service (3% of sales). Required 1. Use the contribution margin ratio CVP formula to compute Pacific Paradise's breakeven sales in dollars. If the average sale is a $700 plane ticket, how many tickets must be sold to break even? 2. Use the income statement equation approach to compute the dollar sales needed to earn a target monthly operating income of $4.160. 3. Graph the travel agency's CVP relationships. Assume that an average sale is a $700 plane ticket. Show the breakeven point, sales revenue line. fixed expense line, total expense line, operating loss area, operating income area, and the sales in units (tickets) and dol- lars when monthly operating income of $4.160 is earned. The graph should range from 0 to 25 units (plane tickets). 4. Assume that the average sale price decreases to $490 per ticket. Use the contribution margin approach to compute the new breakeven point in tickets sold. How does the lower sale price affect the breakeven point?