Sunset Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Hamilton Air. The food costs are $23,500 per month. Hamilton Air charges passengers $1,500 per round-trip ticket. Read the comment.
Begin by selecting the formula to calculate the breakeven points: Breakeven number of units.
Requirement:
Calculate the number of tickets Sunset must sell each month to (a) break even and (b) make a target operating income of $10,000 per month in each of the following independent cases. Round up to the nearest whole number. For example, 10.2 should be rounded up to 11.
1. Sunset's variable costs are $43 per ticket. Hamilton Air pays Sunset 6% commission on ticket price.
2. Sunset's variable costs are $40 per ticket. Hamilton Air pays Sunset 6% commission on ticket price. Sunset's variable costs are $40 per ticket. Hamilton Air pays $60 commission per ticket to Sunset.
Comment on the results: Sunset's variable costs are $40 per ticket. It receives $60 commission per ticket from Hamilton Air. It charges its customers a delivery fee of $5 per ticket.
Print.