[Page-89] Wembley Travel Agency specializes in flights between Los Angeles and London. Its books passengers on United Airlines at $900 per round-trip ticket. Until last month, United paid Wembley a commission of 10% of the ticket price paid by each passenger. This commission was Wembley's only source of revenues. Wembley's fixed costs are $14,000 per month (for salaries, rent, and so on), and its variable costs, such as sales commissions and bonuses, are $20 per ticket purchased for a passenger.
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- Travel Agency specializes in flights between Toronto and Peru. It books passengers on Toronto Air. North’s fixed costs are $35,000 per month. Toronto Air charges passengers $1,700 per round-trip ticket.Calculate the number of tickets North Travel must sell each month to (a) break even and (b) make a target operating income of $17,000 per month in each of the following independent cases.Required:1. North’s variable costs are $33 per ticket. Toronto Air pays Sunset 5% commission on ticket price.2. North’s variable costs are $37 per ticket. Toronto Air pays Sunset 7% commission on ticket price.3. North’s variable costs are $53 per ticket. Toronto Air pays $68 fixed commission per ticket to North. Comment on the results.4. North’s variable costs are $40 per ticket. It receives $60 commission per ticket from Toronto Air. It charges its customers a delivery fee of $5 per ticket. Comment on the results.Travel Agency specializes in flights between Toronto and Peru. It books passengers on Toronto Air. North’s fixed costs are $35,000 per month. Toronto Air charges passengers $1,700 per round-trip ticket.Calculate the number of tickets North Travel must sell each month to (a) break even and (b) make a target operating income of $17,000 per month in each of the following independent cases.Required:1. North’s variable costs are $33 per ticket. Toronto Air pays Sunset 5% commission on ticket price.2. North’s variable costs are $37 per ticket. Toronto Air pays Sunset 7% commission on ticket price.3. North’s variable costs are $53 per ticket. Toronto Air pays $68 fixed commission per ticket to North. Comment on the results.4. North’s variable costs are $40 per ticket. It receives $60 commission per ticket from Toronto Air. It charges its customers a delivery fee of $5 per ticket. Comment on the results. (please give the solution of part 4 and part 5 of this question as the previous are…Sunset Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Hamilton Air. Sunset’s fixed costs are $23,500 per month. Hamilton Air charges passengers $1,500 per round-trip ticket. 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. Q1. Sunset’s variable costs are $43 per ticket. Hamilton Air pays Sunset 6% commission on ticket price. Q2. Sunset’s variable costs are $40 per ticket. Hamilton Air pays Sunset 6% commission on ticket price. Q3. Sunset’s variable costs are $40 per ticket. Hamilton Air pays $60 fixed commission per ticket to Sunset. Comment on the results. Q4. 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. Comment on the results.
- Required information [The following information applies to the questions displayed below.] Marathon Company makes and sells a single product. The current selling price is $18 per unit. Variable expenses are $10.8 per unit, and fixed expenses total $48,280 per month. (Unless otherwise stated, consider each requirement separately.) Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paid a salary of $2,500 per month. g. 1. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.95 per unit, assuming a sales volume of 7,400 units per month. 2. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.95 per unit, assuming a sales volume of 8,600 units per month. h. 1. Assuming that the sales volume of 8,600 units per month…Example 5 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. Required: Under each of the following independent situation. 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 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. Solutions:How do I compute the breakeven point in tickets and in sale dollars? Thrills sells tickets at $50 per person as a one day entrance fee. Variable costs are $28 per person, and fixed costs are $166,500 per month
- Required information [The following information applies to the questions displayed below] Monterey Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $27,000 per month. (Unless otherwise stated, consider each requirement separately) Management is considering a change in the sales force compensation plan. Currently each of the firm's two salespeople is paid a salary of $2,500 per month. g-1. Calculate the monthly operating income (or loss) that would result from changing the compensation plan to a salary of $400 per month, plus a commission of $0.80 per unit, assuming a sales volume of 5,400 units per month. Operating incomePlaypals Park competes with Slide World by providing a variety of rides. Playpals Park sells tickets at $70 per person as a one-day entrance fee. Variable costs are $28 per person, and fixed costs are $258,300 per month. Under these conditions the breakeven point in tickets is 6,150 and in sales dollars is $430,500. Suppose Playpals Park increases fixed costs from $258,300 per month to $304,500 per month. Compute the new breakeven point in tickets and in sales dollars. Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Playpals must sell to break even if its fixed costs are increased to $304,500. (Abbreviation used: CM = contribution margin. Complete all answer boxes. For items with a zero value, enter "0".) ) = = G Required sales in units1. Fulton and Sons, Inc. presently leases a copy machine under an agreement that calls for a fixed fee each month and a charge for each copy made. Fulton made 7,000 copies and paid a total of $360 in March; in May, the firm paid $280 for 5,000 copies. The company uses the high-low method to analyze costs. How much would Fulton pay if it made 5,500 copies? a. $300. b. $322. c. $292.50. d. $382.50. e. None of the answers is correct. 2. The following data relate to the Torrence Company for May and August: May August Maintenance hours 25,000 29,000 Maintenance cost $ 1,175,000 $ 1,247,000 May and August were the lowest and highest activity levels, and Torrence uses the high-low method to analyze cost behavior. If maintenance hours are estimated to be 26,000 hours in October, which of the following statements is true? a. The fixed maintenance cost is $72,000 per month. b. The variable maintenance cost is $22 per hour. c. The variable…
- Maestro Co. employs a salesperson whose salary is $2,000 per month. Once the monthly sales exceed $40,000, the salesperson receives the commission of 5% of the sales made. Which of the following Cost Behavior Patterns describe the salesperson’s salary the most? Question 7Select one: a. Variable costs b. Fixed costs c. Semivariable costs d. Step costsMarkson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.