Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Jolly's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. O Requirement - X Breakeven Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. number of units Fixed costs =D Calculate the number of tickets Jolly must sell each month to (a) break even and (b) make a target operating income of $13,000 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 Fixed costs ) + Contribution margin per unit 1. Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. required to be sold = ( Target operating income 2. Jollys variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. 3. Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Jolly. Comment on the results. 4. Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell 385.14 tickets to break even and ] tickets to meet the target operating income. Case 2: Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Comment on the results. Jolly must sell ] tickets to break even and ] tickets to meet the target operating income. Print Done Case 3: Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Jolly. Comment on the results. Jolly must sell ] üickets to break even and tickets to meet the target operating income. When comparing Case 3 to Case 2, the V commission sizably V the breakeven point and the number of tickets required to yield a target operating income of $13,000. Case 4: Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Comment on the results. Jolly must sell | tickets to break even and | tickets to meet the target operating income. When comparing Case 4 to Case 3, the $6 delivery fee results in a contribution margin which both the breakeven point and the number of tickets sold to attain operating income of $13,000.
Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Jolly's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. O Requirement - X Breakeven Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. number of units Fixed costs =D Calculate the number of tickets Jolly must sell each month to (a) break even and (b) make a target operating income of $13,000 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 Fixed costs ) + Contribution margin per unit 1. Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. required to be sold = ( Target operating income 2. Jollys variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. 3. Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Jolly. Comment on the results. 4. Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell 385.14 tickets to break even and ] tickets to meet the target operating income. Case 2: Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Comment on the results. Jolly must sell ] tickets to break even and ] tickets to meet the target operating income. Print Done Case 3: Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Jolly. Comment on the results. Jolly must sell ] üickets to break even and tickets to meet the target operating income. When comparing Case 3 to Case 2, the V commission sizably V the breakeven point and the number of tickets required to yield a target operating income of $13,000. Case 4: Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Comment on the results. Jolly must sell | tickets to break even and | tickets to meet the target operating income. When comparing Case 4 to Case 3, the $6 delivery fee results in a contribution margin which both the breakeven point and the number of tickets sold to attain operating income of $13,000.
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 12EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...
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Transcribed Image Text:Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Jolly's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket.
Read the requirement.
Begin by selecting the formula to calculate the breakeven points.
Requirement
Breakeven
number of units
Fixed costs
Contribution margin per unit
=
Calculate the number of tickets Jolly must sell each month to (a) break even and
(b) make a target operating income of $13,000 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.)
Next, select the formula to calculate the number of tickets needed to meet the target operating income.
Quantity of units
1. Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission
on ticket price.
2. Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission
on ticket price.
3. Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission
per ticket to Jolly. Comment on the results.
4. Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket
from Ottawa Air. It charges its customers a delivery fee of $6 per ticket.
required to be sold = (
Fixed costs
Target operating income
Contribution margin per unit
Now complete the requirement for each of the cases. Begin with case 1.
Case 1: Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price.
Jolly must sell
385.14 tickets to break even and
tickets to meet the target operating income.
Case 2: Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price.
Comment on the results.
Jolly must sell
tickets to break even and
tickets to meet the target operating income.
Print
Done
Case 3: Jolly's variable costs are $28 per ticket. Ottawa Air pays $47 fixed commission per ticket to Jolly. Comment on the results.
Jolly must sell
tickets to break even and
tickets to meet the target operating income.
When comparing Case 3 to Case 2, the
V commission sizably
V the breakeven point and the number of tickets required to yield a target operating income of $13,000.
Case 4: Jolly's variable costs are $28 per ticket. It receives $47 commission per ticket from Ottawa Air. It charges its customers a delivery fee of $6 per ticket. Comment on the results.
Jolly must sell
tickets to break even and
tickets to meet the target operating income.
When comparing Case 4 to Case 3, the $6 delivery fee results in a
contribution margin which
both the breakeven point and the number of tickets sold to attain operating income of $13,000.
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