Question

famous productions performs London shows. the average show sells 1,300 tickets at $60 per ticket. There are 140 shows per year.

Famous Productions performs London shows. The companies. The average show has a cast of 65, each earing a net average of $340 per show. The cast is paid ather each show. The other variable cost is a program-prinieg coat of 58 por queet Areal fxod costs average show sells 1 300 kees at Seo per tcket There ษข 140 shows per yer No a dio ral shows can be held as the heater is aso used byother proucton total $728.000 Read the reguirements Requirement 1. Compute revenue and variable costs for each show Select the formula and enter the amounts to comoute sales revenue for each show Sales revenue per show Select the formula and enter the amounts to compute variable coets for each show Compuile the variable coets per show for oach cost separabely, and then compute the total variable costs per show " Varable costs per show Cost of programs Cost of performers Total variable costs Requirement 2 Use the equation approach to compute the number of shows Famous Productions must perform each year to break even First, select the formuia to compute the nequired sales in units to break even Target proft Rearrange the formula you detemined above and oompute the required number of shows to break even The rumber of shows needed annualy to break even is Choose from any ist or enter any number in the input fields and then continue to the next question

Answer 1

Requirement 1		Compuation of Revenue & Variable Costs for ech show.
		No. of ticket * price per ticket                           =	Sales Revenue per show
		1300*60                                                                =	78000
	Cost of programms	Programme printing cost of each Guest*No. of tickets	=1300*8	=	10400
	Cost of Performers	No. of cast*average earning of each cast	=65*340	=	22100
	Total Variable cost per show				32500
Requirement 2
		Sales Revenue*No. of shows-Variable cost*No. of shows-Fixed cost=Target profit
		To Compute the required number of shows to breakeven is
		To fin the number of shows to breakeven, the target profit has to be 0
		Then No. of shows*(Sales revene - variable cost) = fixed cost
		No. of shows*(78000-32500)=728000
	No. of shows to breakeven is	=728000/(78000-32500)	=	16
Requirement 3	To earn a profit of 5687500
		(Fixed cost+Targer profit)/Contribution margin ratio   =		Required sales in dollars
		(728000+5687500)/58.3333333%               =		10998000
		Contribution margin ratio =Contribution/Sales%
		Contribution margin ratio =(78000-32500)/78000%
		58.33333333
		Divide the Dollar sales by Revenue per show to arrive at No, of shows to earn the profit of $5687500
		=10998000/78000	=	141
	Yes	This profit goal is realistic	since the Famous production is already performing 140 shows a year.
Requirement 4		Sales Revenue	10920000
		Variable costs	4550000
		Fixed costs	728000
		Operating Income	5642000