Question

Fave Motion Pictures sells movie tickets for $ 15 per movie patron. Variable costs are $ 9.00 per movie patron and fixed costs are $ 51 comma 000 per month. The​ company's relevant range extends to 33 comma 000 movie patrons per month. What is Fave Motion​ Pictures' projected operating income if 20 comma 000 movie patrons see movies during a​ month?

Answer 1

Answer:

Fave Motion​ Pictures' projected operating income if 20,000 movie patrons see movies during a​ month is  $ 69,000.

Explanation:

We subtract the variable and fixed costs from the sales revenue to get the projexted operating income.

Fave Motion Pictures

Operating Income for 20,000 units

Sales  $ 15 * 20,000=                   $ 300,000

Variable costs  $ 9.00 *20,000 = $180,000

Fixed costs                                       $ 51, 000

Operating Income                             $ 69,000

Fave Motion Pictures

Operating Income for 33,000 units

Sales  $ 15 * 33,000=                   $ 495,000

Variable costs  $ 9.00 *33,000 = $297,000

Fixed costs                                       $ 51, 000

Operating Income                             $ 147,000

The fixed costs will not change as they are treated as period costs given per month.  Fave Motion​ Pictures' projected operating income if 20,000 movie patrons see movies during a​ month is  $ 69,000.