(L. OBJ. 4) Sensitivity analysis of changing sale price and variable costs on breakeven...

(L. OBJ. 4) Sensitivity analysis of changing sale price and variable costs on breakeven point [10 min]

Refer to Short Exercise 18-5.

Requirements

1. Suppose Storytime Park cuts its ticker price from $70 to $60 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. Carry your computations to five decimal places.

2. Ignore the information in requirement 1. Instead, assume that Storytime Park reduces the variable cost from $15 to $10 per ticket. Compute the new breakeven point in tickets and in dollars. Carry your computations to five decimal places.