Question

Steve invests in a circus production. The cost includes an overhead of $84,000, plus production costs of $2000 per performance. A sold-out performance brings in $8000. Determine the number of soldout performances, x, needed to break even.

Answer 1

14

Explanation:

Given that Steve invests in a circus production. The cost includes an overhead of $84,000, plus production costs of $2000 per performance. A sold-out performance brings in $8000.

Sales per performance =8000

Production cost per performance =2000

Contribution per performance =
`8000-2000=6000`

Overhead costs = 84000

Break even units = overhead cost/contribution per performance

=
`(84000)/(6000) \\=14`

14 performances should be done to break even