amazin productions performs london shows This Question: 1 pt 1013 (o complete) T

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amazin productions performs london shows

This Question: 1 pt 1013 (o complete) This Quiz: 3 pts possi Amazing Productions performs London shows. The average show sells 900 tickets at $65 per ticket. There are 155 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 pad after each show. The other variable cost is program-printing cost of $9 per guest. Annual fxed costs total $580,500. Requirements 1. Compute revenue and variable costs for each show 2.Use the equation approach to compute the number of shows Amazing Productions must perform each year to break even. 3. Use the contribution margin rato apprcach 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 Amazirg Productions's contritution margin income statement for 155 shows performed in 2016. Report only two categories of costs: variable and fixed Requirement 1. Compute revenue and variable costs for each show. Select the formula and enter the amounts to compute sales revenue for each show Sales revenue per show Select the formula and enter the amounts to compute variable costs fcr each show. Compute the variable costs per show for each cost separately, and then compute the total varable costs per show. Variable costs per show Cost of programs Cost of performers Total variable ccsts Requirement 2. Use the equation approach to compute the number of shows Amazing Productions must perform each year to break even. First, select the formula to compute the required sales in units to break even Target profit 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 Requirement 3. Use the contribution margin ratio approach to compute the number of shows needed each year to eam 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 t two decimal places, XX XX. Abbreviation used: CM = contribution margin.) )1 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. The profit goal of S4,128,000 is Requirement 4. Prepare Amazing Productions's contribution margin income statement for 155 shows performed in 2016. Report only two categories of costs: variable and fixed since Amazing Productions currently performs 155 shows a year. Amazing Productions Contribution Margin Income Statement Year Ended December 31, 2016 Operating Income (Loss)

Explanation / Answer

Req 1: Sales revenue per show Number of tickets * Selling price per ticket = Sales revenue per show 900 tickets * $ 65 per ticket = $ 58,500 per show Variable cost per show Cost of program Printing cost per guest * Number of guest = Variable cost per show Cost of Performers Average earning per performers * Number of performers = Variable cost per show Cost of Program $ 9 * 900 = 8,100 Cost of performers $ 330 * 55 = 18150 TOTAL variable cost per show 26,250 Req 2: Let number of shows to break even be X Target profit be Nil Total sales revenue be 58500*X Total Variable cost be 26,250 *X Total fixed cost $ 580,510 Formula for Break even shows: Sales Revenue - Total Variable cost - Total Fixed cost = Target Profit 58,500 *X - 26,250 *X - 580,510 = 0 Therefore, Number of shows to break even (X) = 18 shows Req3: Desired profits : $ 4128,000 Fixed cost $ 580,510 Desired contribution (4128,000+580,510) = $ 4708,510 Sales revenue per show $ 58,500 Variable cost per show $ 26,250 Contribution per show (58500-26250) = $ 32,250 per show Required shows to be peform= Desired contribution / Contribution per show                    ( 4708,510 /32,250 ) = 146 shows As there are 155 shows per year, therefore, the company can achieve the target profit by performing 146 shows Req4: Contribution income statement for 155 shows Sales revenue (155 shows @58,500) 9067500 Less: variable cost (155 shows @26,250) 4068750 Contribution 4998750 Less: Fixed cost 580510 Net Operating income 4418240

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