Calculating contribution margin per unit, breakeven point in sales units and

calculating contribution margin ratio, breakeven point in sales dollars (20

points).

Holy Smokes Amusement competes with Wave Runner by providing a variety of rides. Holy Smokes

sells tickets at $50 per person as a one-day entrance fee. Variable costs are $10 per person, and fixed

costs are $240,000 per month.

REQUIREMENTS: (use the matrix reporting format from Exhibit 21-6, page 1283)

1) Compute the contribution margin per unit and the number of tickets Holy Smokes must sell to

break even. Perform a numerical proof to show that your answer is correct.

2) Compute Holy Smokes contribution margin ratio (Utilize the contribution margin per unit

calculated in (1). Carry your computation to two decimal places. Use the contribution margin

ratio approach to determine the sales revenue Holy Smokes needs to break even.