accounting End of Chapter: Cost$-$Volume$-$Profit Analysis

$1,000$ tickets at $$60$ per ticket. There are $175$ shows a year. No additional

shows can be held as the theater is also used by other production

companies. The average show has a cast of $60,$ each earning a net average

of $$320$ per show. The cast is paid after each show. The other variable cost

is a program$-$printing cost of $$8$ per guest. Annual fixed costs total

$$459,200.$

Requirements

Compute revenue and variable costs for each show.

Use the equation approach to compute the number of shows

Famous Productions must perform each year to break even.

Use the contribution margin ratio approach to compute the number

of shows needed each year to earn a profit of $$4,264,000.$ Is this profit

goal realistic? Give your reasoning.

CMR $54\mathrm{.}67\%$

Prepare Famous Productions' contribution margin income statement

for $175$ shows performed in the year. Report only two categories of

costs: variable and fixed. Requirements

Calculate the weighted$-$average contribution margin.

Determine Delectable's monthly breakeven point in dozens of plain

donuts and custard$-$filled donuts. Prove your answer by preparing a

summary contribution margin income statement at the breakeven

level of sales. Show only two categories of costs: variable and fixed.

Compute Delectable's margin of safety in dollars for May $2024.$

$$41,000$

Compute the degree of operating leverage for Delectable Donuts.

Estimate the new operating income if total sales increase by $20\%.$

$($Round the degree of operating leverage to four decimal places and

the final answer to the nearest dollar. Assume the sales mix remains

unchanged.$)$

Prove your answer to Requirement $4$ by preparing a contribution

margin income statement with a $20\%$ increase in total sales. $($The sales

mix remains unchanged.$)$