Chapter 21, Problem P21.55APGA

To determine

Concept Introduction:

Break-even point is a point at which the total sales equal the total costs. In the same manner, break-even sales mean that the volume of sales, equates to the cost of the company. We can say that the sale done just to recover the costs incurred by the company is the break-even sales. Moreover, the contribution margin is the excess of revenue over the variable cost of the product.

1) The revenue and variable cost for each show.

2) The number of shows England productions must perform each year to break even, using equation approach.

3) The number of shows needed to earn a profit of $ 5,687,500, using contribution margin ratio approach. Also, explain if the goal is realistic.

4) England Production’s contribution margin income statement for 175 shows, reporting only two categories of costs: variable and fixed.