1. Cu 2: (4im)

Story Park competes with Splash World by providing a variety of rides. Story sells tickets at

$50 per person as a one-day entrance fee. Variable costs are $10 per person, and fixed costs are

$240,000 per month.

Requirements:

1. Compute the number of tickets Story must sell to break even.
2. Compute Story Parks contribution margin ratio. Carry your computation to two decimal places.
3. Use the contribution margin ratio to determine the sales revenue Story Park needs to break even.
4. Suppose Story Park cuts its ticket price from $50 to $40 to increase the number of tickets sold. Compute the new break even point in tickets and in sales dollars.
5. Ignore the information in Requirement 1. Instead, assume that Story Park increases the variable cost from $10 to $20 per ticket. Compute the new break even point in tickets and in sales dollars.