Question
Alfrah Park sells tickets a $60 per person as a one-day entrance fee. Variable costs are $24 per person, and fixed costs are $226,800 per
Alfrah Park sells tickets a $60 per person as a one-day entrance fee. Variable costs are $24 per person, and fixed costs are $226,800 per month.
Requirements:
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Compute Alfrah Parks contribution margin ratio.
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Determine the sales revenue Alfrah Park needs to break even.
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Suppose Alfrah Park cuts its ticket price from $60 to $54 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars.
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Ignore the information in Requirement 3. Instead, assume that Alfrah Park increases the variable cost from $24 to $30 per ticket. Compute the new breakeven point in tickets and in sales dollars.
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Ignore the information in Requirement 3 & 4.I f Alfrah Park expects to sell 7,000 tickets, compute the margin of safety in tickets and in sales dollars.
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If Alfrah Park expects to sell 7,000 tickets, compute the degree of operating leverage.
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