The settler\'s chuck wagon sells tickets for dinner and a show for $50 each. The

Question

The settler's chuck wagon sells tickets for dinner and a show for $50 each. The cost of providing dinner is $23 per ticket and the fixed cost of operating the theater is $115,000 per month. The company can accommodate 13,500 patrons each month what is the contribution margin of Sealer's Chuck Wagon? What is the breakeven point in units? What would the operating income be if Settler's Chuck Wagon sales 7,500 tickets? How many tickets does Settler's Chuck Wagon need to sell to get an operating income of $100,000?

Explanation / Answer

Sales Ticket Price 50 Variable Cost --dinner cost 23 Contribution Margin 27 Break even point in units =fixed cost/Contribution per unit =115000/27 4259 Operating Margin Contribution 7500*27 202500 Less Fixed Cost 115000 Operating Margin 87500 Operating Margin 100000 Add Fixed Cost 115000 Contribution Margin 215000 No of ticket to be sold Contribution margin/Contribution per unit =215000/27 7963

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