Question

Rocky Mountain Waterpark sells half of its tickets for the regular price of $65. The other half goes to senior citizens and children for the discounted price of $45. Variable cost per guest is $10 for both groups, and fixed costs total $45,000 per month. What is Rocky Mountain's breakeven point in total guests? Regular guests? Discount guests?

a. 1,000; 500; 500
b. 692; 346; 346
c. 1,052; 526; 526
d. 500; 250;

Answer 1

To find the breakeven point of Rocky Mountain Waterpark, set the total revenue equal to the total cost. Assuming the number of regular guests is x, the breakeven point for total guests is 1,052, and the breakeven point for regular and discounted guests is 526.

Step-by-step explanation:

To find the breakeven point, we need to equate the total revenue with the total cost. Let's assume the number of regular guests is x. Since half of the tickets are sold at $65, the revenue from regular guests is 65x. The revenue from discounted guests is also 65x since the other half of the tickets are sold at $45. The total revenue is then 65x + 65x = 130x.

The total cost can be calculated by adding the fixed costs of $45,000 to the variable costs per guest, which is $10 per guest for both regular and discounted guests. Let's assume the number of total guests is N. The total cost is then $45,000 + $10N. Setting the total revenue equal to the total cost, we have 130x = $45,000 + $10N. Since half of the tickets are sold at the regular price, we have x = N/2. Substituting this value into the equation, we get 130(N/2) = $45,000 + $10N. Solving for N, we find N = 1,052. Therefore, the breakeven point in total guests is 1,052, and the breakeven point for regular guests and discounted guests is 1,052/2 = 526.