Suppose that the Saddledome, the home of the Calgary Flames, earns total revenue that averages $28 for every ticket sold. Assume that annual fixed expenses are $22 million, and that variable expenses are $6 per ticket.
Requirements
1. Prepare the hockey rink’s CVP graph under these assumptions. Label the axes, sales revenue line, fixed expense line, total expense line, operating loss area, and operating income area on the graph.
2. Show the break-even point in dollars and in tickets.