Question

Imagination Park competes with Cool World by providing a variety of rides. Imagination sells tickets at $70 per person as a one-day entrance fee. Variable costs are $42 per person, and fixed costs are $170,800 per month. Compute the contribution margin per unit and the number of tickets Imagination Park must sell to break even. Perform a numerical proof to show that your answer is correct. Begin by selecting the formula labels and then entering the amounts to compute the contribution margin per unit. Net sales revenue per unit Variable costs per unit = Contribution margin per unit 42 = $ 28 Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Imagination must sell to break even. (Abbrevision used: CM = contribution margin. Complete all answer boxes. For items with a zero value, enter "0".) Target profit Required sales in units ( ( Fixed costs 170800 + + )/ ) CM per unit = 28

Answer 1

Sol. Contribution Margin perunit => -- - Sadle's Revenue per cuit - Variable cost per vuit = $70 - $42 a $ 28 Break - Even Point (In vuit) => - Fixed Cost - Contribution Margin per unit $ 170,800 $ 28 6,100 vuit Imagination Park must sell total of 6, 100 unit for Break-even, where there is "Neither Profil nor loss".

Working Nore. -Proof Imagination Park Income Statement Under Marzinoul Costing Particulars I Amount Sadle's Revenue (6,100 vuit x $70) $ 427,000 vous $(256,200) Jessi Variable lost (6,loouuit & $42) Contribution Margin $ 170,800 Tesi fixed cost $(170, 800) Profit / Closs) NIL 1. Sales Rereuve = Number of unit Sold & = 6,100 vuit x $ 70 $ 427,000 Selling Price percuit . 2. Variable Cost => - = Number of unit Produced & Variable Cest pervuit 6, 100 unit x $42 $ 256,200