British Productions_CVP Analysis

British ProductionsBritish Productions performs London shows. The average show sells 900 tickets at $65 per ticket. There are 155 shows a year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $330 per show. The cast is paid after each show. The other variable cost is program-printing cost of $9 per guest. Annual fixed costs total $580,500.

Requirements

1. Compute revenue and variable costs for each show.

2. Use the income statement and equation approach to compute the number of shows British Productions must perform each year to break even.

3. Use the contribution margin approach to compute the number of shows needed each year to earn a profit of $4,128,000. Is this profit goal realistic? Give your reasoning.

4. Prepare British Productions’ contribution margin income statement for 155 shows performed in 2012. Report only two categories of costs: variable and fixed.