Question

Brilliant Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ontario Air. Brilliant’s fixed costs are $ 36,000 per month. Ontario Air charges passengers $ 1,300 per round-trip ticket. Calculate the number of tickets Brilliant must sell each month to
(a) Break even
(b) Make a target operating income of $ 12,000 target operating income of $12,000 per month in each of the following independent cases.

Required
1. Brilliant’s variable costs are $ 34 per ticket. Ontario Air pays Brilliant 10% commission on ticket price.
2. Brilliant’s variable costs are $ 30 per ticket. Ontario Air pays Brilliant 10% commission on ticket price.
3. Brilliant’s variable costs are $ 30 per ticket. Ontario 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 Ontario Air. It charges its customers a delivery fee of $ 8 per ticket. Comment on the results.



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  • CreatedMay 14, 2014
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