/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q10SE Question: Use the following info... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 20: Q10SE (page 1122)

Question: Use the following information to complete Short Exercises S20-10 through S20-15.

Funday Park competes with Cool World by providing a variety of rides. Funday Park sells tickets at \(70 per person as a one-day entrance fee. Variable costs are \)42 per person, and fixed costs are $170,800 per month.

S20-10 Computing contribution margin per unit, breakeven point in sales units

Compute the contribution margin per unit and the number of tickets Funday Park must sell to break even. Perform a numerical proof to show that your answer is correct.

Short Answer

Expert verified

Answer

The number of break-even sales are 6,100.

Step by step solution

01

Calculation of Contribution margin

Contributionmargin=Salesprice--Variablecost=$70-$42=$28

02

 Step 2: Calculation of number of tickets funday park must sell to break even

Netsalesrevenue-Variablecosts-Fixedcosts=TargetprofitNumberofunitssold脳$28-$170,800=$0Numberofunitssold=6,100Units

03

Substituting the number of units into operating income equation

Totalcontributionmargin-Fixedcosts=Operatingincome6,100Units脳$28-$170,800=Operatingincome$170,800-$170,800=Operatingincome$0=Operatingincome

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Question: What is target profit?

A chain of convenience stores has one manager per store who is paid a monthly salary. Relative to the number of stores, is the manager鈥檚 salary fixed or variable? Why?

What is the margin of safety? What are the three ways it can be expressed?

What are the three approaches to calculating the sales required to achieve the breakeven point? Give the formula for each one.

No Slip Co. produces sports socks. The company has fixed costs of\(91,080 and variable costs of \)0.81 per package. Each package sells for $1.80.

Requirements

1. Compute the contribution margin per package and the contribution marginratio. (Round your answers to two decimal places.)

2. Find the breakeven point in units and in dollars using the contributionmargin approach.
See all solutions

Recommended explanations on Business Studies Textbooks

Sales in Business

Read Explanation

Financial Performance

Read Explanation

Influences On Business

Read Explanation

Operational Management

Read Explanation

Business Development

Read Explanation

Business Data Analytics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.