Compute revenue and variable costs for each show.
Select the formula and enter the amounts to compute sales revenue for each show.
Net sales revenue per unit
x
Number of units sold
=
Sales revenue per show
$60
x
1,000
=
$60,000
Select the formula and enter the amounts to compute variable costs for each show. Compute the variable costs per show for each cost​ separately, and then compute the total variable costs per show.
Variable costs per unit
x
Number of units
=
Variable costs per show
Cost of programs
$8
x
1,000
=
$8,000
Cost of performers
$320
x
60
=
$19,200
Total variable costs
$27,200
Requirement 2. Use the equation approach to compute the number of shows
City ProductionsCity Productions
must perform each year to break even.
​First, select the formula to compute the required sales in units to break even.
Net sales revenue
-
Variable costs
-
Fixed costs
=
Target profit
Rearrange the formula you determined above and compute the required number of shows to break even.
The number of shows needed annually to break even is
nothing.
performs London shows. The average show sells
1 comma 0001,000
tickets at
$ 60$60
per ticket. There are
170170
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
6060​,
each earning a net average of
$ 320$320
per show. The cast is paid after each show. The other variable cost is​ program-printing cost of
$ 8$8
per guest. Annual fixed costs total
$ 459 comma 200$459,200.
Requirements
1.
Compute revenue and variable costs for each show.
2.
Use the equation approach to compute the number of shows
City ProductionsCity Productions
must perform each year to break even.
3.
Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of
$ 4 comma 264 comma 000$4,264,000.
Is this profit goal​ realistic? Give your reasoning.
4.
Prepare
City ProductionsCity Productions​'s
contribution margin income statement for
170170
shows performed in
20162016.
Report only two categories of​ costs: variable and fixed