If political influences, independent of any economic forces, lead to a larger government budget deficit, what will be the effect
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Answer:
a. Average selling price per unit = $30
b. Average variable cost = $16
c. Average Contribution margin per ticket = $14
d. Break Even Point = 46,600 Tickets
e. For profit of $306,600 = 68,500 tickets
Explanation:
As for the provided information we have,
a. Average selling price per unit =
Provided total sales revenue = $1,980,000
Number of units = $66,000
Thus, average selling price = = $30 per unit.
b. Average variable cost =
Provided total variable cost = $1,056,000
Number of units = $66,000
Thus, average variable cost per unit = = $16 per unit
c. Average Contribution margin per ticket = Average selling price per ticket - Average variable cost per ticket = $30 - $16 = $14 per unit.
Alternatively it can be calculated as =
d. Break Even Point =
Fixed cost = $652,400
Contribution per unit = $14 per unit
Break even point = = 46,600 Tickets
e. In this case desired profit = $306,600
Fixed cost = $652,400
Total amount to be recovered through contribution = $306,600 + $652,400 = $959,000
Thus, number of tickets to be sold =
That is 68,500 tickets.