Anu’s Amusement Center has collected the following data for operations for the y

Question

Anu’s Amusement Center has collected the following data for operations for the year:

a. What is the average selling price for a ticket?

b. What is the average variable cost per ticket?

c. What is the average contribution margin per ticket?

d. What is the break-even point?

e. Anu has decided that unless the operation can earn at least $355,600 in operating profits, she will close it down. What number of tickets must be sold for Anu’s Amusements to make a $355,600 operating profit for the year on ticket sales?

(Do not round intermediate calculations.)

Total revenues $ 2,176,000 Total fixed costs $ 631,400 Total variable costs $ 1,224,000 Total tickets sold 68,000

Explanation / Answer

a) Average selling price for a tickets 2176000/68000= $32 per ticket b) Average Variable cost per ticket 1224000/68000tickets = $ 18 per tickets c) Average Contribution margin per tickets ( selling price per ticket-variable cost per ticket) $32 per ticket- $18 per ticket = $14 per ticket d) profit = (contribution -fixed cost) let profit = 0 0= (32-18)x-631400 x= 631400/14 x= 45100 tickets e) let profit = 355600 355600 = (32-18)x-631400 x= 355600+631400/14 x= 70500 tickets

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