Learning from Facebook So what’s the big problem that Facebook’s trying to focus? Its mission is “to give people the power to share and make the world more open and connected.”2 In giving power to the people through tools (Facebook profiles, pages, apps, Messenger, and so on), the digital giant has created ways for brands to have direct and individualized links to customers, and the company is able to leverage this conduit for its revenue and profits. There is no predefined industry boundary that limits how Facebook thinks about the power of sharing to people across the globe and helping the world become smaller than the familiar “six degrees of separation.” Its Whapp and Messenger apps aim to redefine interactions between consumers and businesses (conversational commerce) using social web and messaging platforms. Its Facebook Live video-streaming app connects broadcasters and viewers in real time and competes with YouTube, Amazon, Comcast, and Verizon. Its Oculus virtual reality headset—a new tool for immersive, shared social experience—allows viewers to go inside their favorite games and movies and competes with Google (Daydream) and Microsoft (HoloLens). It is working on deploying solar powered drones to deliver Internet access to remote rural parts of the world. In this domain, it is pitted against Alphabet and Amazon. Remember, these are no longer products; they are tools that enable individuals to share and connect on the social web. In solving the thorny frictions that prevent seamless connectivity, Facebook is not only better linking companies to customers but increasing its

What’s the big problem?

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1. Compute revenue and variable costs for each show. 2. Use the equation approach to compute the number of shows Tower 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 $4,128,000. Is this profit goal realistic? Give your reasoning. 4. Prepare Tower Productions's contribution margin income statement for 140 shows performed in 2018. Report only two categories of costs: variable and fixed. Tower Productions performs London shows. The average show sells 900 tickets at $65 per ticket. There are 140 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 55, each earning a net average of $330 per show. The cast is paid after each show. The other variable cost is a program-printing cost of $9 per guest. Annual fixed costs total $580,500. Read the requirements. Requirement 1. Compute revenue and variable costs for each show. Select the formula and enter the amounts to compute sales revenue for each show. X = Sales revenue per show = Requirement 2. Use the equation approach to compute the number of shows Tower Productions must perform each year to break even. First, select the formula to compute the required sales in units to break even. Rearrange the formula you determined above and compute the required number of shows to break even. The number of shows needed annually to break even is Target profit Requirement 3. Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $4,128,000. Is this profit goal realistic? Give your reasoning. Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn a profit of $4,128,000. (Round the required sales in dollars to the nearest whole dollar. Round amounts in the formula to two decimal places, XX.XX. Abbreviation used: CM = contribution margin.) = Required sales in dollars + + )/ % Now use the information given and the required sales in dollars computed in the previous step to determine the required number of shows needed each year to earn a profit of $4,128,000. (Round your answer up to the nearest whole number.) The number of shows needed annually to earn a profit of $4,128,000 is Is this profit goal realistic? Give your reasoning.