An amusement park for kids faces a fixed cost of $ 300,000 per month and an...

An amusement park for kids faces a fixed cost of $ 300,000 per month and an average variable cost of $ 12 per visitor. It charges all visitors a flat entry fee of $29 for unlimited rides. This park’s capacity is 50,000 persons per month.

a) What is the breakeven point for this park? What percentage of the capacity refers to this breakeven point?

b) Because of the recent pandemic situation, the government lets the park authorities open the amusement park only with 30% of its capacity. Considering your answer to a, do you think that the amusement park will be able to make any profit? Explain your answer.

c)what is the level of visitors in the percentage of its capacity? where this park maximizes the profit ?

d) The park accommodates 42,000 visitors per month on average. If the variable cost per visitor raises by 28%, what entry fee per person you would propose to the company in order to cover all costs? What is the percentage change of the new breakeven point, if the variable cost increases to $ 18 per visitor?

e) Because of a radical increase in the entrance fee, the park receives 11.500 visitors in a month. If the visitor’s cost increases further by 25% on top of the last increase ($18), do you think that the park will be profitable?

Solutions

Expert Solution

The first 4 sub parts are explained in the images attached. We cannot answer more than 4 sub part. The second part of part d, the Q and P are not mentioned so I considered Q = 42000.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

A manufacturing process has a fixed cost of $300,000 per month. Each unit of product being...

A manufacturing process has a fixed cost of $300,000 per month. Each unit of product being produced contains $160 worth of material and $220 in labor. Each finished product will sell for $450. How many units must be sold each month to break even? What level of monthly revenue is necessary to break even? What is the expected profit for sales levels of 1,000, 2,500, and 5,000 units respectively.

Evans Park Evans Park is a small amusement park that provides a variety of rides for...

Evans Park Evans Park is a small amusement park that provides a variety of rides for children and teens. In a typical summer season, the park sells twice as many child tickets as adult tickets. Adult ticket prices are $18 and the children’s price is $10. Revenue from food and beverage concessions is estimated to be $60,000, and souvenir revenue is expected to be $25,000. Variable costs per person (child or adult) are $3.25. Fixed costs amount to $150,000. Build...

Crescent City Fun Park (Crescent City), an amusement park with thrilling rides and a water park,...

Crescent City Fun Park (Crescent City), an amusement park with thrilling rides and a water park, sells tickets onsite and has a website that allows customers to purchase tickets in advance and bypass the long lines. Customers who use the website include the general public and travel agents. Both individuals and travel agents can purchase tickets online using a major credit card. Some travel agents prefer the option of using the website to purchase tickets, but rather than pay with...

Crescent City Fun Park (Crescent City), an amusement park with thrilling rides and a water park,...

PLEASE ANSWER LETTERS A-F THOROUGHLY The Twelve-stars Amusement Park The Twelve-stars traveling amusement park has recently...

*PLEASE ANSWER LETTERS A-F THOROUGHLY* The Twelve-stars Amusement Park The Twelve-stars traveling amusement park has recently set up operation in the East Bay. The arrival rate of patrons at the park is estimated as 35 per hour. There is one admissions gate, staffed by a single worker. Admissions can be conducted at an estimated rate of 40 per hour. 40% of patrons go directly to the Ferris wheel, while 30% go to the rollercoaster. The remaining 30% go to the...

The total fixed cost is $60 per month. (a) If the price pervisit is $60,...

The total fixed cost is $60 per month. (a) If the price per visit is $60, at what level of visits will the maximum profit position be? (b) What are the profits at this level?(c) What is the quantity supplied? (d) If the total fixed cost increases to $80 and the price per visit is $60, what is the quantity supplied (assuming maximizing profits)?quantity per visits supplied:1,2,3,4,5,6,total variable cost: 20,50,90,140,210,290

Amusement Park ABC has an average of 230 customers per hour arriving at a ticket counter...

Amusement Park ABC has an average of 230 customers per hour arriving at a ticket counter where 8 employees are working. Each employee can serve an average of 30 customers per hour. The squared coefficient of variation for the inter-arrival times is 1.5 and 2 for the service times. a) On average, how many customers will be present at the ticket counter? b) On average, how long will a customer have to wait for an employee?

Hardley sells mamburgers. He faces fixed costs of $18,000 per month and variable production and marketing costs

Hardley sells mamburgers. He faces fixed costs of $18,000 per month and variable production and marketing costs of $2 per mamburger. Market research has developed the following demand schedule. Which price/volume combination should Yardley choose? A. Price: $12; Quantity: 4,000 B. Price: $10; Quantity: 5,500 C. Price: $8; Quantity: 7,000 D. Price: $6; Quantity: 9,000 E. Unable to determine

Cullumber Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost

Cullumber Corporation, an amusement park, is considering a capital investment in a new exhibit. The exhibit would cost $179,935 and have an estimated useful life of 9 years. It can be sold for $64,800 at the end of that time. (Amusement parks need to rotate exhibits to keep people interested.) It is expected to increase net annual cash flows by $25,800. The company’s borrowing rate is 8%. Its cost of capital is 10%. Click here to view the factor table.Calculate...

A company has estimated fixed cost of $30,000 per month for 0 - 600,000 apples per...

A company has estimated fixed cost of $30,000 per month for 0 - 600,000 apples per month. The apples are sold in packs of 10 sold for $8 per pack. At 100% capacity the apples have a total variable cost of $30000 per month. 1) What is the yearly profit at the max capacity? 2) What is the break even production amount?

Subjects