Analysis of England Productions' Revenue and Profitability:

School: Stevens Institute Of Technology - Course: BT 215 - Subject: Accounting

QUESTION #1: Requirement 1: "England Productions performs London shows. The average show sells1,300 tickets at $60 per ticket. There are 175shows per year. No additional shows can be held as the theater is also used by other production companies. The average show has acast of 65, each earning a net average of $340 per show. The cast is paid after each show. The other variable cost is aprogram-printing cost of$8 per guest. Annual fixed costs total $728,000." Requirement 2: Net sale revenue → sales revenue per show*number of shows Variable costs → variable costs per show*number of shows Fixed costs →annual fixed costs (which was $728,000) EQUATION: =(sales revenue per show*number of shows)-(variable costs per show*number of shows)-annual fixed costs =(78000x)-(32500x)-728000 728000=45500x x=16 → the number of shows needed annually to break even

Requirement 3: CM RATIO EQUATION: =[(sales revenue per show-variable cost per show)/sales revenue per show]*100 =[(78000-32500)/78000]*100 =58.33% REQUIRED SALES IN DOLLARS EQUATION: =(fixed costs+target profit)/CM ratio =(728000+5687500)/58.33 =10998628 REQUIRED SALES IN UNITS EQUATION: =required sales in dollars/sales revenue per show =10998628/78000 =141→ number of shows needed annually to earn a profitof $5687500 THE PROFIT IS REALISTIC IF THE NUMBER OF SHOWS NEEDED ISLESS THANTHE CURRENT NUMBER OF SHOWS PERFORMED Here, it is realistic because 141<175