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process required Q1b. Cleartrip Travel Agency specializes in flights between Los Angeles and London. It books passengers on United Airlines at $1200 per round-trip ticket

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Q1b. Cleartrip Travel Agency specializes in flights between Los Angeles and London. It books passengers on United Airlines at $1200 per round-trip ticket United paid Cleartrip a commission of 12% of the ticket price paid by each passenger. This commission was Cleartrip's only source of revenues. Cleartrip's fixed costs are $20,000 per month for salaries, rent and so on), and its variable costs, such as sales commissions and bonuses. are $29 per ticket purchased for a passenger United Airlines has just announced a tevised payment schedule for all travel agents. It will now pay travel agents a 10% commission per ticket up to a maximum of 570. Any ticket costing more than $500 generates only a $70 commission, regardless of the ticket price. Cleartrip's managers are concerned about how United's new payment schedule will affect its breakeven point and profitability. Required: a) Show the impact of change in commission structure on break even units and break even revenue for Cleartrip b) If Cleartrip needs a minimum profit of $5000 per month (560,000 per annum) what is the number of tickets it needs to sell under the two commission structures (5+5 = 10)

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