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Question - Sparkle Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Burlington Air. Sparkle's fixed costs are $27,000 per month. Burlington Air charges passengers $1,000 per round ticket.
Case 1: Sparkle's variable costs are $30 per ticket. Burlington Air pays Sparkle 8% commission on ticket price. How many tickets must Sparkle sell to break even? How many tickets need to be sold to meet the target operating income?
Case 2: Sparkle's variable costs are $26 per ticket. Burlington Air pays Sparkle 8% commission on ticket price. How many tickets must Sparkle sell to break even? How many tickets need to be sold to meet the target operating income?
Case 3: Sparkle's variable costs are $26 per ticket. Burlington Air pays $50 fixed commission per ticket to Sparkle. How many tickets must Sparkle sell to break even? How many tickets need to be sold to meet the target operating income?
Prepare the journal entry required for each of the following transactions - Service were performed for customer on account, $4,200
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