Business
Read the case in the attachment file and answer question 2.
2. Using the budget prepared in Question 1:
a. Identify each cost as variable, fixed, or step in relation
to tickets sold. Hint: Determine the weighted average
ticket price and contribution margin from the sales mix
information (percentage of adult tickets vs. percentage
of student and senior tickets).
b. In the first case, assume that all funds are to come from
ticket sales only and that there are four shows in total.
Compute the breakeven point in number of tickets to
be sold and in U.S. dollars.
c. In the second case, assume the same in (b) but only
three shows in total. Compute the breakeven point in
number of tickets to be sold and in U.S. dollars.
B. In the third case, assume that SETU would receive
sponsorship funds (cash and in-kind donations) in
addition to ticket sales for four shows. Compute the
breakeven point in number of tickets to be sold and in
U.S. dollars.
e. In the fourth case, assume that SETU would receive
sponsorship funds (cash and in-kind donations) in
addition to ticket sales for three shows. Compute the
breakeven point in number of tickets to be sold and in
U.S. dollars.
f. Comment on the feasibility of the required number
of ticket sales computed from above, keeping in mind
the nature of the play, that it is staged by a community
theater organization, and the ethnicity aspect. Suggest
ways for SETU to achieve the necessary amount of
ticket sales.
