=+2-47 KK Gross margin and contribution margin OBJECTIVE 7 The Museum of Art is preparing for its annual appreciation dinner for contributing members. Last year, 525 members attended the dinner. Tickets for the dinner were $24 per attendee. The profit report for last year’s dinner follows:

Ticket sales $12 600 Cost of dinner 15 300 Gross margin (2 700)

Invitations and paperwork 2 500 Profit (loss) $(5 200)

This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the committee analysed last year’s costs. Of the $15300 cost of the dinner, $9000 were fixed costs and $6300 were variable costs. Of the $2500 cost of invitation and paperwork, $1975 were fixed and $525 were variable.

Required 1 Prepare last year’s profit report using the contribution margin format.