The Director of Annie Smith Dance Center is asking for assistance with the financial aspects of running a professional group of performers. She wants financial information presented in an easy to read format and a better understand of the profitability of the concerts and the organization as a whole. The Annie Smith professional group features four dance concerts each year. Three of the dance concerts showcase a different genre. The fourth performance is a Christmas Spectacular, which is the most popular dance concert and is therefore scheduled every year. Ms. Smith has tentatively scheduled the following four dance concerts for the coming season. The schedule below shows the type and number of performances and direct cost per type of concert. Examples of direct fixed costs are costumes, rehearsals, royalties, guest artist fees, choreography, and salaries of production staff, music, and wardrobe for each of the four concerts.

Descriptions	Number of Performances	Cost per Dance Concert (direct fixed costs)
Hip Hop Concert	10	$45,000
Jazz and Tap Dance	5	88,000
Modern Dance	10	95,000
Christmas Spectacular	20	25,000
		$253,000

Additional costs:

Variable costs associated with each performance are shown below.

Musicians	$7,500
Rental of auditorium	2,500
Dancers' compensation	7,000

General administrative and operating costs for the dance center are:

Administrative staff	$185,000
Insurance	25,000
Marketing	215,000
General office expenses	90,000

	Lower Orchestra Section (A)			Upper Orchestra Section (B)
Descriptions	No. of Seats	Ticket Price	Tickets Sold per Performance	No. of Seats	Ticket Price	Tickets Sold per Performance
Hip Hop Performance	150	$85	100%	450	$50	90%
Jazz and Tap Dance	150	$85	100%	450	$50	60%
Modern Dance	150	$85	100%	450	$50	95%
Christmas Spectacular	150	$125	100%	450	$50	100%

Required:

Computations (use Excel)

Summarize key financial information in a table as shown below.

Title
Name of Dance Concert	Revenues/Performance	Variable Costs/Performance	Contribution Margin/Performance	Total Contribution/Type of Dance Concert	Direct Fixed Costs	Segment Margin/Type of Concert
1.
2.
3.
4.
Total

Prepare a segmented income statement in good format.

Compute the number of performances required to break even for each concert. These are separate computations for each dance concert.

Compute break even for the organization as a whole and express the result in revenues instead of the number of performances.

Ms. Smith wants to performance group to show at least $150,000 in operating profit. What level of revenues does the performance group need to achieve to meet this goal?

Give a recommendation about changes Ms. Smith can make to achieve the target profit. Support your idea with computations.

																					Multi Concert Break-Even
			Lower Orchestra Section (A)			Upper Orchestra Section (B)														Break-Even/Performance	Sales Mix	Constant Sales Mix Ratio	Weighted Avg. Contribution Margin per Performance
Descriptions	Number of Performances	Cost per Dance Concert (Direct Fixed Costs)	No. of Seats	Ticket Price	Tickets sold per peformance	No. of Seats	Ticket Price	Tickets sold per peformance		(A)	(B)	Revenues per Performance	Revenues Per Dance Concert	Variable Performance Costs	Dance Concert Costs	CM/perf	CM/Concert	Dir FC	Seg Mar
Hip Hop Performance	10	$ 45,000	150	$ 85	100%	450	$ 50	90%					$ 33,000	7,500							10	0.222222222	$ -
Jazz and Tap Dance	5	$ 88,000	150	$ 85	100%	450	$ 50	60%					$ 26,250	2,500							5	0.111111111	$ -
Modern Dance	10	$ 95,000	150	$ 85	100%	450	$ 50	95%					$ 34,125	7,000							10	0.222222222	$ -
Christmas Spectacular	20	$ 25,000	150	$ 125	100%	450	$ 50	100%					$ 41,250								20	0.444444444	$ -
		$ 253,000								$ -	$ -	$ -	$ 134,625	$ 17,000					$ -		45	1.0000000	$ -
												Var Costs	17,000
												CM	117,625
												Dir Fixed	-
												Seg Margin	$ 117,625								Dir + Comm Fixed		$ 515,000
												Common Fixed	515,000								Break-even Point in Units of Sales Mix
Additional costs inclurred for each performance (variable costs)												OI	$ (397,375)
Musicians		7,500																						Rounded
Rental of auditorium		2,500																			Perf.	Hip Hop
Dancer's compensation		7,000																			Perf.	Jazz
																					Perf.	Modern
Total additional costs		17,000																			Perf.	Spectacular
																					Sales Needed for profit of $150,000
The auditorium has 1,400 seats.																					All fixed costs + target profit
																					Average contribution margin ratio
Other costs incurred by the Annie Smith's Dance Center (common fixed costs)																					Sales necessary to achieve $150,000 in profit
Administrative staff		185,000
Insurance		25,000
Marketing		215,000
General office expenses		90,000