Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Babolat Park competes with Water World by providing a variety of rides. Babolat Park sells tickets at $80 per person as a one-day entrance fee.

Babolat Park competes with Water World by providing a variety of rides. Babolat Park sells tickets at $80 per person as a one-day entrance fee. Variable costs are $34 per person, and fixed costs are $326,800 per month. (33 points)

  1. Compute the contribution margin per unit and the number of tickets Babolat Park must sell to break even. Perform a numerical proof to show that your answer is correct.
  2. Compute Babolat Parks contribution margin ratio. Carry your computation to two decimal places. Use the contribution margin ratio approach to determine the sales revenue Babolat Park needs to break even.
  3. Suppose Babolat Park cuts its ticket price from $80 to $54 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars.

d) Ignore the information in question a. Instead, assume that Babolat Park increases the variable cost from $34 to $40 per ticket. Compute the new breakeven point in tickets and in sales dollars

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

23rd Edition

978-0324662962

More Books

Students also viewed these Accounting questions

Question

LO10.2 List the conditions required for purely competitive markets.

Answered: 1 week ago