Question
Breakeven and target profit The Broadway show Hamilton performs each year and the average show sells 1,400 tickets at $55 a ticket. There are 125
Breakeven and target profit
The Broadway show Hamilton performs each year and the average show sells 1,400 tickets at $55 a ticket. There are 125 shows each year. The show has a cast of 45, each earning an average of $310 per show. The cast is paid only after each show. The other variable expense is program printing costs of $8 per guest. Annual fixed expenses total $829,600.
Requirements:
1. Compute revenue and variable expenses for each show. (5 pts)
2. Use the income statement equation approach to compute the number of shows needed annually to break even. (4 pts)
3. Use the shortcut unit contribution margin approach to compute the number of shows needed annually to earn a profit of $6,533,100. (4 pts) Is this goal realistic? Give your reason. (3 pt)
4. Prepare Hamilton's contribution margin income statement for 125 shows each year. (6 pt)
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