A traveling production of Shrek performs each year. The average show sells 1,000 tickets at $45 per ticket. There are 120 shows a year. The show has a cast of 45, each earning an average of $300 per show. The cast is paid only after each show. The other variable expense is program printing expenses of $9 per guest. Annual fixed expenses total $787,500.

Requirements

1. Compute revenue and variable expenses for each show.

2. Compute the number of shows needed annually to break even.

3. Compute the number of shows needed annually to earn a profit of $3,262,500. Is this goal realistic? Give your reason.

4. Prepare Shrek's contribution margin income statement for 120 shows each year. Report only two categories of expenses: variable and fixed.