Chapter 6.4, Problem 8PPE

To determine

To calculate: Number of performances must be sold for breakeven.

Answer to Problem 8PPE

55 performances

Explanation of Solution

Given information: Producing a musical cost $\$88,000$ plus $\$5900$ per performance. One sold out performance earns $\$7500$ in revenue.

Calculation:

Let’s assume for breakeven $x$ number of performances are required.

Now, for $x$ performances, cost price (C.P.) is $88000+5900x$ and selling price (S.P) is $7500x$

Now, for breakeven, C.P is equal to S.P.

  $\therefore 88000+5900x=7500x$

  $\therefore x=55$

Therefore, 55 performances must be sold for breakeven