Question

Funtime Park competes with Splash World by providing a variety of rides. Funtime sells tickets at $ 90 per person as a​ one-day entrance fee. Variable costs are $ 18 per​ person, and fixed costs are $ 464 comma 400 per month. Under these​ conditions, the breakeven point in tickets is 6 comma 450 and the breakeven point in sales dollars is ​$580 comma 500. Read the requirements LOADING.... Requirement 1. Suppose Funtime Park cuts its ticket price from $ 90 to $ 72 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Funtime must sell to break even under this scenario. ​(Abbreviation used: CM​

Answer 1

BEPd 619,200‬

BEPu 8,600

Step-by-step explanation:

1) sales price at 72:

`Sales \: Revenue - Variable \: Cost = Contribution \: Margin`

contribution per unit

72 - 18 = 54

`(Contribution \: Margin)/(Sales \: Revenue) = Contribution \: Margin \: Ratio`

54 / 72 = 75%

`(Fixed\:Cost)/(Contribution \:Margin \:Ratio) = Break\: Even\: Point_(dollars)`

464,400 / 0.75 = 619,200‬

in units: sales to break even 619,200 / 72 unit sales price = 8.600‬

Answer 2

The new breakeven point in tickets is 8,600 and in sales dollars $619,200

Step-by-step explanation:

BP=FC/CM

BP= breakeven point

FC=fixed cost

CM=contribution margin

8,600=464,400/(72-18)

8,600*72= $619,200