Walt Disney Company provided the following data for its amusement park operations:

• Fixed Costs: $15,000,000
• Variable Costs per Visitor: $50
• Ticket Price per Visitor: $100
• Annual Visitors: 500,000

Requirements:

1. Prepare a Break-Even Analysis.
2. Calculate the Break-Even Point in number of visitors.
3. Determine the margin of safety in both dollars and percentage.
4. Analyze the impact of a 5% increase in ticket price on the Break-Even Point.
5. • Discuss the role of pricing strategy in achieving profitability.

Question 1

Boeing has received an order to manufacture three types of aircraft: 737, 747, and 787. The following information is available for each job:

Aircraft	Direct Materials	Direct Labor	Overhead Rate (% of Direct Labor)
737	$40,000,000	$20,000,000	150%
747	$60,000,000	$25,000,000	150%
787	$80,000,000	$30,000,000	150%

Requirements:

1. Compute the total cost for each aircraft.
2. Determine the total manufacturing overhead applied to each job.
3. Calculate the total job cost for Boeing.
4. Prepare a Job Cost Sheet for each aircraft.
5. Analyze the cost structure and suggest areas for potential cost reduction.