Air France changes its commission structure to travel agents. Up to a ticket price of €600, the 8% commission applies. For tickets costing €600 or more, there is a fixed commission of €48. Assume Soleil Voyages has fixed costs of €22 000 per month and variable costs of €29 per ticket (including a €12 delivery fee by Lièvre-Express).
Required
1 What is the number of Paris-to-London round-trip tickets Soleil Voyages must sell each month to (a) break even, and (b) make a target operating profit of €10000? Comment on the results.
2 Soleil Voyages decides to charge its customers a delivery fee of €5 per ticket. How would this change affect your answers to (a) and (b) in requirement 1? Comment on the results.