P-M:4-55A Calculating breakeven sales and sales to earn a target profit; preparing a contribution margin income...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6652dfacc75d3_2446652dfacc19f1.jpg)
Transcribed Image Text:
P-M:4-55A Calculating breakeven sales and sales to earn a target profit; preparing a contribution margin income statement England Productions performs London shows. The average show sells 1,300 tickets at $60 per ticket. There are 175 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 65, each earning a net average of $340 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $8 per guest. Annual fixed costs total $728,000. Requirements 1. Compute revenue and variable costs for each show. 2. Use the equation approach to compute the number of shows England Productions must perform each year to break even. 3. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $5,687,500. (Round contribution ratio to two decimal places.) Is this profit goal realistic? Give your reasoning. 4. Prepare England Productions' contribution margin income statement for 175 shows performed in the year. Report only two categories of costs: variable and fixed. P-M:4-55A Calculating breakeven sales and sales to earn a target profit; preparing a contribution margin income statement England Productions performs London shows. The average show sells 1,300 tickets at $60 per ticket. There are 175 shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 65, each earning a net average of $340 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $8 per guest. Annual fixed costs total $728,000. Requirements 1. Compute revenue and variable costs for each show. 2. Use the equation approach to compute the number of shows England Productions must perform each year to break even. 3. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $5,687,500. (Round contribution ratio to two decimal places.) Is this profit goal realistic? Give your reasoning. 4. Prepare England Productions' contribution margin income statement for 175 shows performed in the year. Report only two categories of costs: variable and fixed.
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
a. Describe the process of spore formation and explain how a single fungal spore can lead to the development of a mature mycelium. b. Candida albicans is a dimorphic fungus. Explain what is meant by...
-
The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the...
-
Evaluate the importance of information systems knowledge amongst senior business managers in achieving successful alignment of business and IS/IT strategies.
-
Alder Cough Drops operates two divisions. The following information pertains to each division for 2013. Required a. Compute each divisions residual income. b. Which division increased the companys...
-
A charity has sold 400 raffle tickets for $70 each. The prize is valued at $1200. If you bought a raffle ticket, what is the expected value of your winnings?
-
What conclusion can you reach by analyzing the graph in figure 1, what does it indicate or what does it predict? Use chemical rationale to justify your answer. 70 60 50 40 30 10 15 20 25 30 35...
-
W9. Using the values measured in Step BP2, Part (b), calculate the frequency of the sine-wave voltage functions. Compare it to the known frequency of the 110-V (household power) line. Calculate the...
-
Very recently, Biogen, the US biotech company won a patent battle against the generic drugmaker, Mylan over its bestselling medicine for multiple sclerosis. Biogen will now be able to sell Tecfidera,...
-
In preparation of your next meeting with the them, you now need to review the financial information. You are responsible for creating a report based off of this information. Analyze the assets &...
-
Last month, Harun was delighted to receive news on the birth of his twin girls but the good news was shattered when he was told that his wife, Salmah, was diagnosed with acute pulmonary embolism and...
-
Torres Company began business on June 30, 2018. At that time, it issued 30,000 shares of $40 par value, 8% cumulative preferred stock and 120,000 shares of $5 par value common stock. Through the end...
-
Which of the following is a main focus of labour relations metrics? a) Incidence and duration of strikes b) Labour force participation rates c) Costs associated with collective agreement clauses d)...
-
What two considerations complicate short-term product mix decisions? (LO 1, 2)
-
"Prices must cover both variable and fixed costs of production." Do you agree with this statement? Explain. (LO 2, 3)
-
What firms are likely to behave as price-taker firms? (LO 1, 4)
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App