Anus Amusement Center has collected the following data for operations for the year: Total revenues . .

Question:

Anu’s Amusement Center has collected the following data for operations for the year:

Total revenues . . . . . . . . . . . . . . . . . . $800,000

Total fixed costs . . . . . . . . . . . . . . . . . $218,750

Total variable costs . . . . . . . . . . . . . . $450,000

Total tickets sold . . . . . . . . . . . . . . . . 50,000

Required

a. What is the average selling price for a ticket?

b. What is the average variable cost per ticket?

c. What is the average contribution margin per ticket?

d. What is the break-even point?

e. Anu has decided that unless the operation can earn at least $43,750 in operating profits, she will close it down. What number of tickets must be sold for Anu’s Amusements to make a $43,750 operating profit for the year on ticket sales?

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...