978-0133428704 Chapter 3 Solution Manual Part 3

subject Type Homework Help
subject Pages 9
subject Words 1553
subject Authors Charles T. Horngren, Madhav V. Rajan, Srikant M. Datar

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$ 1,700
$58,500
48,000
$106,500
30,000
$ 76,500
Breakeven point in units =
Net fixed costs
Contribution margin per concert
=
$76,500
$1,700
= 45 concerts
Check
Donations
$ 30,000
Revenue ($4,500 × 45)
202,500
Total revenue
232,500
Less variable costs
Guest performers ($1,800 × 45)
$81,000
Marketing and advertising ($1,000 × 45)
45,000
Total variable costs
126,000
Less fixed costs
Salaries
$58,500
Lease payments
48,000
Total fixed costs
106,500
Operating income
$ 0
Operating Income if 41 concerts are held
Donations
$ 30,000
Revenue ($4,500 × 41)
184,500
Total revenue
214,500
Less variable costs
Guest performers ($1,800 × 41)
$73,800
Marketing and advertising ($1,000 × 41)
41,000
Total variable costs
114,800
Less fixed costs
Salaries
$58,500
Lease payments
48,000
Total fixed costs
106,500
Operating income (loss)
$ (6,800)
The Music Society would not be able to afford the new marketing director if the number of concerts
were to increase to only 41 events. The addition of the new marketing director would require the
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