A traveling production of Wicked performs each year. The average show sells 1,400 tickets at $65…

A traveling production of Wicked performs each year. The average show sells 1,400 tickets at $65 per ticket. There are 100 shows a year. The show has a cast of 65, each earning an average of $320 per show. The cast is paid only after each show. The other variable expense is program printing expenses of $6 per guest. Annual fixed expenses total $2,163,000.

Requirements

1. Compute revenue and variable expenses for each show.

2. Compute the number of shows needed annually to breakeven.

3. Compute the number of shows needed annually to earn a profit of $3,708,000. Is this goal realistic? Give your reason.

4. Prepare Wicked’s contribution margin income statement for 100 shows each year. Report only two categories of expenses: variable and fixed.

 

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