Vikas Travel Agency (VTA) specializes in flights between Delhi to Bangalore. It books passengers on Dolphin Airlines at ` 9,000 per round-trip ticket. Until last month, Dolphin paid VTA a commission of 10% of the ticket price paid by each passenger. This commission was VTAs only source of revenues. VTAs fixed costs are ` 1,40,000 per month (for salaries, rent and so on) and its variable costs are ` 200 per ticket purchased for a passenger. This ` 200 includes ` 150 per ticket delivery fee paid to Senti Express. (` 150 delivery fee applies to each ticket).

Dolphin Airlines has just announced a revised payment schedule for travel agents. It will now pay travel agents a 10% commission per ticket up to a maximum of ` 500. Any ticket costing more than ` 5,000 generates only a ` 500 commission, regardless of the ticket price.

Required

1. Under the old 10% commission structure, how many round-trip tickets must VTAs sell each month (a) to break-even and (b) to earn an operating income of ` 70,000.
2. How does Dolphin revised payment schedule affect your answers to (a) and (b) in requirement (i)?