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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
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 Traver's only source of revenues. Neva Travel's fixed costs are $14,000 per month (tor 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 bulk 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 (easy) Under the old 10% commission structure, how many round trip tickets must Neva Travel Agency sell each month (C) to break even and (b) to earn an operating income of $7.000? (0) BEP v 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 (a) and (a) tickets needed to earn an operating the income of $7.0002 (c) SEP_Revised is tickets (value is rounded up) (b) to earn 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
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