Exercise 3-25 Basic Decision Analysis Using CVP (LO 3-1) Anu’s Amusement Center has collected the following...
Exercise 3-25 Basic Decision Analysis Using CVP (LO 3-1)
Anu’s Amusement Center has collected the following data for operations for the year:
| Total revenues | $ | 2,244,000 |
| Total fixed costs | $ | 777,600 |
| Total variable costs | $ | 1,156,000 |
| Total tickets sold | 68,000 | |
Required:
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? (Do not round intermediate calculations.)
d. What is the break-even point? (Do not round intermediate calculations.)
e. Anu has decided that unless the operation can earn at least $350,400 in operating profits, she will close it down. What number of tickets must be sold for Anu’s Amusements to make a $350,400 operating profit for the year on ticket sales? (Do not round intermediate calculations.)
What are the number of tickets?
Homework Answers
| Ans.a | Average selling price = Total revenues / Total tickets sold | |||
| 2244000 / 68000 | ||||
| $33.00 | per ticket | |||
| Ans.b | Average variable cost per ticket = Total variable costs / Total tickets sold | |||
| 1156000 / 68000 | ||||
| $17.00 | per ticket | |||
| Ans.c | Average contribution margin = Average selling price - Average variable cost per ticket | |||
| $33 - $17 | ||||
| $16.00 | per ticket | |||
| Ans.d | Break even point = Fixed cost / contribution margin per unit | |||
| 777600 / $16 | ||||
| 48600 | tickets | |||
| Ans.e | Number of tickets = (Fixed cost + desired Profit) / Contribution margin per ticket | |||
| (777600 + 350400) / 16 | ||||
| 1128000 / 16 | ||||
| 70500 tickets | ||||
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Exercise 3-25 Basic
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Anu’s Amusement Center has collected the following data for operations for the year. Total revenues $...
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Total revenues
$
1,943,000
Total fixed costs
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Total variable costs
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1,072,000
Total tickets sold
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Required:
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? (Do not round intermediate
calculations.)
d. What is the break-even point? (Do
not round intermediate calculations.)
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Anu’s Amusement Center has collected the following data for
operations for the year.
Total revenues
$
1,943,000
Total fixed costs
$
594,100
Total variable costs
$
1,072,000
Total tickets sold
67,000
Required:
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? (Do not round intermediate
calculations.)
d. What is the break-even point? (Do
not round intermediate calculations.)
e. Anu has decided...
Anu's Amusement Center has collected the following data for operations for the year. Total revenues Total fixed costs Total variable costs Total tickets sold $1,932,000 $ 541,200 $1,104,000 69,000 Required: 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? (Do not round intermediate calculations.) d. What is the break-even point? (Do not round intermediate calculations.) e. Anu has decided that unless...
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Problem 3-20 Various CVP Questions: Break-Even Point: Cost Structure: Target Sales [LO 3-1, LO 3-3, LO 3-4,LO 3-5. LO 3-6, LO 3-81 Northwood Company manufactures basketballs. The company has a ball that sells for $49. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Thus, variable expenses are high, totaling $34.30 per ball, of which 70% is direct labor cost. Last year, the company sold 58,000 of these balls, with the following...
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