3-23 CVP analysis, changing revenues and costs. Brilliant Travel Agency specializes in flights between Toronto...
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3-23 CVP analysis, changing revenues and costs. Brilliant Travel Agency specializes in flights between Toronto and Vishakhapatnam. It books passengers on EastWest Air. Brilliant's fixed costs are $36,000 per month. EastWest Air charges passengers $1,300 per round-trip ticket. Calculate the number of tickets Brilliant must sell each month to (a) break even and (b) make a target oper- ating income of $12,000 per month in each of the following independent cases.
1. Brilliant's variable costs are $34 per ticket. EastWest Air pays Brilliant 10% commission on ticket price.
2. Brilliant's variable costs are $30 per ticket. EastWest Air pays Brilliant 10% commission on ticket price.
3. Brilliant's variable costs are $30 per ticket. EastWest Air pays $46 fixed commission per ticket to Brilliant. Comment on the results.
4. Brilliant's variable costs are $30 per ticket. It receives $46 commission per ticket from EastWest Air. It charges its customers a delivery fee of $8 per ticket. Comment on the results.
3-23 CVP analysis, changing revenues and costs. Brilliant Travel Agency specializes in flights between Toronto and Vishakhapatnam. It books passengers on EastWest Air. Brilliant's fixed costs are $36,000 per month. EastWest Air charges passengers $1,300 per round-trip ticket. Calculate the number of tickets Brilliant must sell each month to (a) break even and (b) make a target operating income of $12,000 per month in each of the following independent cases. 1. Brilliant's variable costs are $34 per ticket. EastWest Air pays Brilliant 10% commission on ticket price. 2. Brilliant's variable costs are $30 per ticket. EastWest Air pays Brilliant 10% commission on ticket price. 3. Brilliant's variable costs are $30 per ticket. EastWest Air pays $46 fixed commission per ticket to Brilliant. Comment on the results. 4. Brilliant's variable costs are $30 per ticket. It receives $46 commission per ticket from EastWest Air. It charges its customers a delivery fee of $8 per ticket. Comment on the results
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