cmpetos with Cool World by providing a variety of rides. Funday Park sels Sokats

Question

cmpetos with Cool World by providing a variety of rides. Funday Park sels Sokats at $70 per person as a one-day entrance fee Variable Funday Park's contribution margin ratio. Camy your computation to two decimal places. Use the contribution mangin ratio approach to defermine o sales revenon Funday Park needs to break eve costs aro $42 per son, and fixed costs are $170,800 per more, compute Begn by telo trg the formula labels and ten enter the amoun to orpule the orebution margnato. Erlr *u answer to te nearest Begin by seleding the fomula enter 0") and then entering the amounts to caloulate the sales in dollars Funday needs to break even(Asbreviation used CM-contribution mangin Compiete at arswer boxes. For lems with a zoro valn Required saies in dolars

Explanation / Answer

Selling price per ticket     $70 per person Variable cost per person   $ 42 per person Total Fixed cost   $ 170,800 Contribution per person (Selling price - variable cost ) =( 70-42) = $ 28 per unit Formula for CM ratio: Contribution per unit / Selling price per unit = Contribution margin Ratio $ 28 per unit / $ 70 per unit = 40% Formula for Break even in $: (Fixed cost + Target Profit) / CM Ratio % = Break even sales in $ (170,800 + 0 ) / 40% = $427,000 Note: Here Target profit is Nil, as at break even point, there is no profit no loss.

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