Golden Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Vancouver Air. Golden's fixed costs are $25,500 per month. Vancouver Air charges passengers $1,400 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven O Requirement number of units Fixed costs Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Calculate the number of tickets Golden must sell each month to (a) break even and (b) make a target operating income of $15,000 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.) Quantity of units required to be sold = ( Fixed costs Target operating income Contribution margin per unit 1. Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 2. Golden's variable costs are $38 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 3. Golden's variable costs are $38 per ticket. Vancouver Air pays $55 fixed commission per ticket to Golden. Comment on the results. 4. Golden's variable costs are $38 per ticket. It receives $55 commission per ticket from Vancouver Air. It charges its customers a delivery fee of $8 per Now complete the requirement for each of the cases. Begin with case 1. Case 1: Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. Golden must sell tickets to break even and tickets to meet the target operating income. ticket. Comment on the results. Print Done
Golden Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Vancouver Air. Golden's fixed costs are $25,500 per month. Vancouver Air charges passengers $1,400 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven O Requirement number of units Fixed costs Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Calculate the number of tickets Golden must sell each month to (a) break even and (b) make a target operating income of $15,000 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.) Quantity of units required to be sold = ( Fixed costs Target operating income Contribution margin per unit 1. Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 2. Golden's variable costs are $38 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 3. Golden's variable costs are $38 per ticket. Vancouver Air pays $55 fixed commission per ticket to Golden. Comment on the results. 4. Golden's variable costs are $38 per ticket. It receives $55 commission per ticket from Vancouver Air. It charges its customers a delivery fee of $8 per Now complete the requirement for each of the cases. Begin with case 1. Case 1: Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. Golden must sell tickets to break even and tickets to meet the target operating income. ticket. Comment on the results. Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Golden Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Vancouver Air. Golden's fixed costs are $25,500 per month. Vancouver Air charges passengers $1,400 per round-trip ticket.
Read the requirement.
Begin by selecting the formula to calculate the breakeven points.
Breakeven
Requirement
number of units
Fixed costs
Contribution margin per unit
Next, select the formula to calculate the number of tickets needed to meet the target operating income.
Calculate the number of tickets Golden must sell each month to (a) break even and
(b) make a target operating income of $15,000 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.)
Quantity of units
required to be sold = (
Fixed costs
Target operating income
) +
Contribution margin per unit
+
1. Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10%
commission on ticket price.
2. Golden's variable costs are $38 per ticket. Vancouver Air pays Golden 10%
commission on ticket price.
3. Golden's variable costs are $38 per ticket. Vancouver Air pays $55 fixed
commission per ticket to Golden. Comment on the results.
4. Golden's variable costs are $38 per ticket. It receives $55 commission per
ticket from Vancouver Air. It charges its customers a delivery fee of $8 per
ticket. Comment on the results.
Now complete the requirement for each of the cases. Begin with case 1.
Case 1: Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price.
Golden must sell
tickets to break even and
tickets to meet the target operating income.
Print
Done
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