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How to compute revenue and variable costs

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Reference no: EM131928005

Question - Calculating break even sales and sales to earn a target profit Using a contribution margin income statement

England productions performs londons shows. The average show sells 1,300 tickets at $60 per ticket. There are 175 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 65, each earning a net average of $340 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $8 per guest.

Annual fixed costs total $728,000

1. How to compute revenue and variable costs?

2. How to use the equation approach to compute the number of shows England Productions must perform each year to break even?

3. How to use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $5,687,500. Is this profit realistic?? What is the reasoning?

4. How would you create England productions contribution margin income statement for 175 shows performed in 2018. Repot only two categories of costs; Variable and fixed.

Reference no: EM131928005

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