Brisbane Travel Agency (BTA) specialises in tour tickets between Brisbane and Los Angeles. It books passengers on Virgin Australia. BTAs fixed costs are $4,000 per month. Virgin Australia charges passengers $1,100 per round-trip ticket. BTA receives a 10 per cent commission on per ticket sold. BTAs variable cost per unit related to ticket sales is $60 per ticket.

Required

a. Calculate the number of tickets BTA must sell each month to: (i) break even in units and dollar and (ii) make a target profit of $2,500 per month? (6 marks)

b. What is a margin of safety? Calculate the margin of safety for BTA in April if the actual sales in April is $16,500. (3 marks)

c. Calculate the contribution margin ratio of BTA. By using very simplest way calculate the profit in April. (3 marks)

d. BTA from Virgin Australia that it will pay $65 fixed commission on per ticket to BTA. BTAs variable costs are $40 per ticket. It charges its customers a delivery fee of $5 per ticket. Calculate BEP in units and dollar and comment on the results. (3 marks)