Question

Sillytime Park competes with Splash World by providing a variety of rides. Sillytime sells tickets at $ 60 per person as aâ one-day entrance fee. Variable costs are $ 24 perâ person, and fixed costs are $ 226 comma 800 per month. Compute Sillytime âPark's contribution margin ratio. Carry your computation to two decimal places. Use the contribution margin ratio approach to determine the sales revenue Sillytime Park needs to break even

Answer 1

Answer:

BEP 378,000

Explanation:

$\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}$

$\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio$

$Sales \: Revenue - Variable \: Cost = Contribution \: Margin$

60 - 24 = 36 contribution margin

every units contribution $36 dollars

36 / 60 = 0.6 CM ratio

each dollar of sale generate 60 cents of contribution

226,800 fixed cost / 0.6 CMR = 378,000 BEP  in dollars