Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i X Requirements 1. Compute the contribution margin per unit and the number of tickets Sillytime Park must sell to break even. Perform a numerical

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

i X Requirements 1. Compute the contribution margin per unit and the number of tickets Sillytime Park must sell to break even. Perform a numerical proof to show that your answer is correct. 2. Compute Sillytime Park's contribution margin ratio. Carry your computation to two decimal places. Use the contribution margin ratio approach to determine the sales revenue Sillytime Park needs to break even. 3. a. Suppose Sillytime Park cuts its ticket price from $125 to $100 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. b. Ignore the information in Requirement 3a. Instead, assume that Sillytime Park increases the variable cost from $75 to $85 per ticket. Compute the new breakeven point in tickets and in sales dollars. 4. Ignore Requirements 3a and 3b. Suppose Sillytime Park reduces fixed costs from $325,000 per month to $324,000 per month. Compute the new breakeven point in tickets and in sales dollars. 5. Ignore Requirements 3 and 4. If Sillytime Park expects to sell 6,600 tickets, compute the margin of safety in tickets and in sales dollars. 6. Ignore Requirements 3 and 4. If Sillytime Park expects to sell 6,600 tickets, compute the operating leverage. Estimate the operating income if sales increase by 10%. Print Done

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

Step: 3

blur-text-image

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

Dynamic Data Sharing For Public Data Integrity Auditing In The Cloud

Authors: B Gunalan

1st Edition

050911878X, 978-0509118789

More Books

Students also viewed these Accounting questions

Question

When and how can CSR become a risk?

Answered: 1 week ago