Question

A traveling production of Fiddler on the Roof performs each year. The average show sells 1,200 tickets at $ 55 a ticket. There are 115 shows each year. The show has a cast of 60, each earning an average of $ 320 per show. The cast is paid only after each show. The other variable expense is program printing costs of $ 9 per guest. Annual fixed expenses total $ 1,224,000.

Requirements
1. Compute revenue and variable expenses for each show.
2. Use the income statement equation approach to compute the number of shows needed annually to breakeven.
3. Use the shortcut unit contribution margin approach to compute the number of shows needed annually to earn a profit of $ 3,888,000. Is this goal realistic? Give your reason.
4. Prepare Fiddler on the Roof’s contribution margin income statement for 115 shows each year. Report only two categories of expenses: variable and fixed.



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  • CreatedAugust 27, 2014
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