Question
2017 BUDGET FOR THE CAPITAL PORTRAITS STUDIO Revenue Studio fees Note Ottawa $260,000 1 Gatineau 130,000 2 Digital images and prints 585,000 3 Total revenue
2017 BUDGET FOR THE CAPITAL PORTRAITS STUDIO
Revenue
Studio fees Note
Ottawa $260,000 1
Gatineau 130,000 2
Digital images and prints 585,000 3
Total revenue 975,000
Variable costs
Photography 195,000 4
Digital images and prints 351,000 5
Total variable costs 546,000
Contribution margin 429,000
Operating costs 300,000
Expected income before tax $129,000
Notes:
1. The Ottawa location expected 500 studio sessions at $400 each and 30 weddings at $2,000
each.
2. The Gatineau location was expected to bring in 50% of the Ottawa location's revenue in its
first year.
3. Revenue from digital images and prints was budgeted at 150% of studio fee revenues.
4. Variable costs for a studio session total $200. Variable costs for a wedding session are
$1,000.
5. Production costs were expected to be 60% of the digital images and prints revenue.
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