The
Rolling Stones Manager is analyzing Big Lips Tour For 2018 across
the United States. He puts the pencil to the paper and begins
performing cost-volume-profit analysis, specifically Break-even
points.
The Stones’ Manager Would Like To perform in McAllen, Texas
Since costs are very economical. Fixed Costs for the performance
total only $500,000. Tickets will sell for for $250.00!
Ticketmaster is responsible for processing ticket orders and
charges The Rolling Stones a Fee Of $20.00 per Ticket. Rolling
Stones expects to sell 7,500 tickets.
Answer the following questions, Making Sure To SHOW all work
and calculations. State your answer in one complete sentence.
Please keep in mind, Rolling Stones cannot sell partial tickets;
therefore round numbers to whole numbers.
1. How many tickets must Rolling Stone sell to break even?
Why? (Show Your Work And use complete sentence structure for the
final answer.)
2. How much must Rolling Stones have in sales dollar to break
even? Why? (Show work and use complete sentence structure for the
final answer.)
3. How many tickets must Rolling Stones sell to earn a profit
of $700,000? Why? Show your work and use complete sentence
structure for the final answer.)
4. How much must Rolling Stones have in sales dollars to earn
a profit of $700,000? Why? (Show Your Work And use complete
sentence structure for the final answer.
5. What is Rolling Stones’ margin of safety in units and sales
dollars? Why? (Show Work And use complete sentence structure for
final answer.)