Madrigal Theater Company is interested in estimating fixed and variable
Madrigal Theater Company is interested in estimating fixed and variable
Madrigal Theater Company is interested in estimating fixed and variable costs. The following data are available:
Required a. Use the high-low method to estimate fixed cost per month and variable costs per ticket sold [i.e., estimate a and b in the equation Cost = a + (b x # of tickets) using the high-low method]. b. Madrigal Theater Company is considering an advertising campaign that is expected to increase annual sales by 14,000 tickets. Assume that the ticket selling price is $25.Ignoring the cost of the advertising campaign, what is the expected increase in profit associated with the advertising campaign? c. (optional) Repeat part a using regression analysis. In light of the result, how would you answer partb?