P22-5B Small World Travel is opening an office in Chicago. Fixed monthly expenses are office rent ($3,700), depreciation of office furniture ($190). utilities ($160), a special tele- phone line ($390), a connection with the airlines' computerized reservation service ($480), and the salary of a travel agent ($1,800). Variable expenses include commissions for the travel agent (12% of sales), advertising (9% of sales), supplies and postage (2% of sales), and usage fees for the telephone line and computerized reservation service (7% of sales). Required 1. Use the contribution margin ratio CVP formula to compute the travel agency's breakeven sales in dollars. If the average sale is an $800 plane ticket, how many tickets must be sold to break even? 2. Use the income statement equation approach to compute dollar sales needed to earn monthly operating income of $3.430. 3. Graph the travel agency's CVP relationships. Assume that an average sale is an $800 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 dollars when monthly operating income of $3,430 is earned. The graph should range from 0 to 20 units (plane tickets). 4. Assume that the average sale price decreases to $640 per ticket. Use the contribution margin approach to compute the new breakeven point in units (tickets). How does the lower sale price affect the breakeven point?