Madrigal Theater Company is interested in estimating fixed and variable costs. The following data are available for the month of December:

*Author royalties/fees are fixed because the theater pays for the right to put on the play; royalties and fees are not paid based on the number of tickets sold.
Required
a. Use account analysis to estimate fixed cost per month and variable cost per tickets sold [i.e., estimate a and b in the equation Cost = - a + (b × Sales)]. Round variable cost per ticket sold to two decimal places.
b. Assume that the selling price per ticket is $25. Based on your answer to part a, what is your estimate of the contribution margin ratio at Madrigal Theater?

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Number of Tickets Sold Cost December Detail of Cost: 42,000 $326,000 80,000 155,000 60,000 Author royalties/fees Wages (ticket office, ushers, etc.) Rent Utilities Depreciation-theater equipment Owner's salary 7,000 14,000 10,000 $326,000 Total