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CVP analysis, changing revenues and costs Sunshine Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Canadian Air. Sunshine's fixed costs are $22,000 per month. Canadian Air charges passengers $1,000 per round-trip ticket Calculate the number of tickets Sunshine 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.
1. Sunshine's variable costs are $35 per ticket. Canadian Air pays Sunshine 8% commission on ticket price.
2. Sunshine's variable costs are $29 per ticket. Canadian Air pays Sunshine 8% commission on ticket price.
3. Sunshine's variable costs are $29 per ticket. Canadian Air pays $48 fixed commission per ticket to Sunshine. Comment on the results.
4. Sunshine's variable costs are $29 per ticket. It receives $48 commission per ticket from Canadian Air. It charges its customers a delivery fee of $5 per ticket. Comment on the results.
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