can someone solve this problem
EXAMPLE 3.1 e.g. Norvik Enterprises operates in the leisure and entertainment industry and one of its activities is to promote concerts at locations throughout Europe. The company is examining the viability of a concert in Helsinki. Estimated fixed costs are $60 000. These include the fees paid to performers, the hire of the venue and advertising costs. Variable costs consist of the cost of a pre-packed buffet that will be provided by a firm of caterers at a price, which is currently being negotiated, but it is likely to be in the region of $10 per ticket sold. The proposed price for the sale of a ticket is $20. The management of Norvik have requested the following information: el 1 The number of tickets that must be sold to break even (that is, the point at which there is neither a profit nor loss). 2 How many tickets must be sold to earn $30 000 target profit? 3 What profit would result if 8000 tickets were sold? 4 What selling price would have to be charged to give a profit of $30 000 on sales of 8000 tickets, fixed costs of $60 000 and variable costs of $10 per ticket? 5 How many additional tickets must be sold to cover the extra cost of television advertising of E8000?The Super Bright Company sells two types of washing machines - a de-luxe model and a standard the period: model. The financial controller has prepared the following information based on the sales forecast for De-luxe Standard machine machine 1200 600 Total Sales volume (units) (E) (E) Unit selling price 300 200 Unit variable cost am.ww 150 110 Unit contribution 150 90 Total sales revenues 360 000 120 000 480 000 Less: Total variable cost 180 000 66 000 246 000 Contribution to direct and common 180 000 54 000 234 000 fixed costs* Less: Direct avoidable fixed costs 90 000 27 000 117 000 Contribution to common fixed costs" 90 000 27 000 1 17 000 Less common (indirect) fixed costs 39 000 Operating profit 78 000 The common fixed costs relate to the costs of common facilities and can only be avoided if neither of the products is sold. The managing director is concerned that sales may be less than forecast and has requested information relating to the break-even point for the activities for the period. Contribution was defined earlier in this chapter as sales less variable costs. Where fixed costs are divided into direct and common (indirect) fixed costs it is possible to identify two separate contribution categories. The first is described as contribution to direct are common fixed costs and this is identical to the conventional definition, being equivalent to sales less variable costs. The second is Bad a further deduction of direct fixed costs and is described as 'Contribution to common of indirect fixed costs