Answer
(a) Number of Tickets to Break-Even
Formula = Fixed Costs / Contribution margin per unit
Fixed Costs (given) USD 36,000
Contribution Margin (W-1) USD 96 Per Ticket
Break-even point (36,000 / 96) 375 Tickets
(b) # of tickets to be sold to earn target profit of $ 12,000 per month
Formula: [(Fixed Costs + Target Profit) / Contribution Margin Per Unit]
=[($36,000 + $12,000) / $96]
500 Tickets
Work Step by Step
(W-1) Contribution Margin Per Unit
Sales price (1,300 × 10%) = 130
Variable costs = 34
Contribution margin( 130 - 34) = 96
