1.1 Cost Behaviour -

Markham Theatre Company is interested in estimating fixed and variable costs. The following data are available:

Table A

Month	Costs	Number of Tickets Sold
January	$160,000	19,000
February	$190,000	22,000
March	$215,000	28,000
April	$217,000	29,000
May	$209,500	29,500
June	$194,500	24,500
July	$240,000	35,000
August	$172,000	20,000
September	$185,000	22,000
October	$202,000	26,000
November	$191,500	23,500
December	$207,000	30,000

1. Using the high-low method of cost estimation:

1. what is the variable cost per ticket sold?
2. what is the fixed portion ($) of the theatre costs?

1. Using the high-low method of cost estimation, express the total costs (fixed costs per month and variable costs per ticket) in equation form.

1. Markham Theatre is considering an advertising campaign that is expected to increase annual sales by 15,000 tickets. Assume that the ticket selling price is $25. Ignoring the cost of the advertising campaign, which has not been provided, what is the expected increase in profits associated with the advertising campaign?