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The Marla and Kerry Theatre Group operates five discount movie theatres in  the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per  patron, and the fixed costs per year total P900,000. The fixed costs include  concessions, but the variable costs do not. The concessions earn an average  contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be  necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.

The Marla and Kerry Theatre Group operates five discount movie theatres in  the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per  patron, and the fixed costs per year total P900,000. The fixed costs include  concessions, but the variable costs do not. The concessions earn an average  contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be  necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Marla and Kerry Theatre Group operates five discount movie theatres in  the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per  patron, and the fixed costs per year total P900,000. The fixed costs include  concessions, but the variable costs do not. The concessions earn an average  contribution margin of P.60 per patron.

a. How many patrons are required to break even?

b. If 800,000 patrons are expected for the year, what ticket price would be  necessary to earn a profit of P150,000?

Determine the number of units to be sold of each of the products to breakeven.

10.The Marla and Kerry Theatre Group operates five discount movie theatres in the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per patron, and the fixed costs per year total P900,000. The fixed costs include concessions, but the variable costs do not. The concessions earn an average contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.
Transcribed Image Text:10.The Marla and Kerry Theatre Group operates five discount movie theatres in the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per patron, and the fixed costs per year total P900,000. The fixed costs include concessions, but the variable costs do not. The concessions earn an average contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.
10.The Marla and Kerry Theatre Group operates five discount movie theatres in the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per patron, and the fixed costs per year total P900,000. The fixed costs include concessions, but the variable costs do not. The concessions earn an average contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.
Transcribed Image Text:10.The Marla and Kerry Theatre Group operates five discount movie theatres in the Chicago area. All tickets are priced at P1.75. Variable costs are P1.10 per patron, and the fixed costs per year total P900,000. The fixed costs include concessions, but the variable costs do not. The concessions earn an average contribution margin of P.60 per patron. a. How many patrons are required to break even? b. If 800,000 patrons are expected for the year, what ticket price would be necessary to earn a profit of P150,000? Determine the number of units to be sold of each of the products to breakeven.
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