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John has been asked to determine whether the $22.50 cost of tickets for the community dinner theater will allow the group to achieve break-even and whether the 175 seating capacity is adequate. The cost for each performance of a 10-performance run is $2,500.

The facility rental cost for the entire 10 performances is $10,000. Drinks and parking are extra charges and have their own price and variable costs, as shown below:

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Selling Price (P) Variable Cost (V) Percent Variable Cost (V/P) Contribution 1- (V/P) Sales

Units Dollar Sales (Sales x P) Percent of sales Contribution Weighted By Precent Sales (Col 5 x Col 8)

Tickets $22.50 $10.50 0.467 0.533 175 $3938 0.741 0.395

Drinks $5.00 $1.75 0.350 0.650 175 $875 0.165 0.107

Parking $5.00 $2.00 0.400 0.600 100 $500 0.094 0.056

Total 450 $5313 1.000 0.558

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Problem 2 John has been asked to determine whether the $22.50 cost of tickets for the community dinner theater will allow the group to achieve break-even and whether the 175 seating capacity is adequate. The cost for each performance of a 10-performance run is $2,500. The facility rental cost for the entire 10 performances is $10,000. Drinks and parking are extra charges and have their own price and variable costs, as shown below: Sell ing Pric Vari able Cost (v 4 Pere ent Vari able 3 6 8 Contrib Sal Dol Pere Contrib ution 1- es lar ent ution (V/P) Sal of its es By Un Weight ed Cost (V/P (P) 0.333 ets Tick $22. STO. 50 SO Drin$5.0 151.7 ks 0 s Park S5.0 $2.0 ing 0 O Tota 0.46 7 0.35 0 0.40 0 (Sal sale Precent CS xs Sales P) (Col 5 x Col 8) $390.74 0.3935 5 38 1 17 587 0.16 0.107 S 5 s 10 SSO 0.09 0.056 0 0 4 45 $53 1.00 0.558 0 13 0 0.650 0.600