A traveling production of Wicked performs each year. The average show sells 1,400 tickets at $55 a
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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 break even.
3. Use the shortcut unit contribution margin approach to compute the number of shows needed annually to earn a profit of $6,533,100. Is this goal realistic? Give your reason.
4. Prepare Wicked's contribution margin income statement for 125 shows each year. Report only two categories of expenses: variable and fixed.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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