Question
Playtime Park competes with Splash World by providing a variety of rides. Playtime sells tickets at $120 per person as a one-day entrance fee. Variable
Playtime Park competes with Splash World by providing a variety of rides. Playtime sells tickets at $120 per person as a one-day entrance fee. Variable costs are $30 per person, and fixed costs are $585,000 per month. Under these conditions, the breakeven point in tickets is 6,500 and the breakeven point in sales dollars is $780,000.
Requirements
1. | Suppose Playtime Park cuts its ticket price from $120 to $75 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. |
2. | Ignore the information in Requirement 1. Instead, assume that Playtime Park increases the variable cost from $30 to $48 per ticket. Compute the new breakeven point in tickets and in sales dollars. |
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Part 1
Requirement 1. Suppose Playtime Park cuts its ticket price from $120 to $75 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Playtime must sell to break even under this scenario. (Abbreviation used: CM = contribution margin. Complete all input fields. For items with a zero value, enter "0".)
( | + | ) | = | Required sales in units |
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