Question
Sparkle Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Sparkle's fixed costs are$ 29,500 per month. Ottawa Air
Sparkle Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Sparkle's fixed costs are$ 29,500 per month. Ottawa Air charges passengers $1,600 per round-trip ticket.
Breakeven number of units = ____ / ____
Calculate the number of tickets Sparkle must sell each month to (a) break even and (b) make a target operating income of $19,000 per month in each of the following independent cases. (Round up to the nearest whole number. Forexample, 10.2 should be rounded up to 11.)
1. | Sparkle's variable costs are $42 per ticket. Ottawa Air pays Sparkle 10% commission on ticket price. |
2. | Sparkle's variable costs are $35 per ticket. Ottawa Air pays Sparkle 10% commission on ticket price. |
3. | Sparkle's variable costs are $35 per ticket. Ottawa Air pays $55 fixed commission per ticket to Sparkle. Comment on the results. |
4. | Sparkle's variable costs are $35 per ticket. It receives $55 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $5 per ticket. Comment on the results. |
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