Russian Railways specialize in fast train trips between Saint Petersburg and Moscow. It books passengers on Neva Travel Agency at $900 per bulk trip ticket (a group of tourists (10 passengers to Moscow and back)). Until last month, Russian Railways paid Neva Travel a commission of 10% of the ticket price paid by each passenger. This commission was Neva Travel's only source of revenues. Neva Travel's fixed costs are $14,000 per month (for salaries, rent, and so on), and its variable costs are $20 per bulk ticket. This $20 includes a $15 per ticket delivery fee paid to Online Payment System MIR. (To keep the analysis simple, we assume each round-trip buik ticket purchased is delivered in a separate package. Thus, the $15 delivery fee applies to each ticket.) Russian Railways has just announced a revised payment schedule for all travel agents. It will now pay travel agents a 10% commission per ticket up to a maximum of $50. Any ticket costing more than $500 generates only a $50 the commission regardless of the ticket price Requirement 1 (easy) Under the old 10% commission structure, how many round trip tickets must Neva Travel Agency sell each month: (a) to break even and (b) to eam an operating income of $7,000? (a) BEP is tickets (b) to earn an operating income of $7,000 they need to sell and Variable cost per unit is s per bulk ticket Requirement 2 (advanced) How does Russian Railways revised payment schedule affect break-even (c) and (d) tickets needed to earn an operating the income of $7,000? (C) BEP_Revised is tickets (value is rounded up) (b) to eam an operating income of $7,000 now they need to sell bulk tickets it's clear that the change of payment schedule the net income of Neva Travel Agency Russian Railways specialize in fast train trips between Saint Petersburg and Moscow. It books passengers on Neva Travel Agency at $900 per bulk trip ticket (a group of tourists (10 passengers to Moscow and back)). Until last month, Russian Railways paid Neva Travel a commission of 10% of the ticket price paid by each passenger. This commission was Neva Travel's only source of revenues. Neva Travel's fixed costs are $14,000 per month (for salaries, rent, and so on), and its variable costs are $20 per bulk ticket. This $20 includes a $15 per ticket delivery fee paid to Online Payment System MIR. (To keep the analysis simple, we assume each round-trip buik ticket purchased is delivered in a separate package. Thus, the $15 delivery fee applies to each ticket.) Russian Railways has just announced a revised payment schedule for all travel agents. It will now pay travel agents a 10% commission per ticket up to a maximum of $50. Any ticket costing more than $500 generates only a $50 the commission regardless of the ticket price Requirement 1 (easy) Under the old 10% commission structure, how many round trip tickets must Neva Travel Agency sell each month: (a) to break even and (b) to eam an operating income of $7,000? (a) BEP is tickets (b) to earn an operating income of $7,000 they need to sell and Variable cost per unit is s per bulk ticket Requirement 2 (advanced) How does Russian Railways revised payment schedule affect break-even (c) and (d) tickets needed to earn an operating the income of $7,000? (C) BEP_Revised is tickets (value is rounded up) (b) to eam an operating income of $7,000 now they need to sell bulk tickets it's clear that the change of payment schedule the net income of Neva Travel Agency
