Question

Use the contribution margin ratio approach to compute the number of shows needed each year to earn a profit of $ 5 comma 687 comma 500. Is this profit goal​ realistic? Give your reasoning. Begin by showing the formula and then entering the amounts to calculate the required sales dollars to earn a profit of $ 5 comma 687 comma 500. ​(Round the required sales in dollars to the nearest whole dollar. Round amounts in the formula to two decimal​ places, XX.XX. Abbreviation​ used: CM​ = contribution​ margin.)

Answer 1

Instructions are listed below

Step-by-step explanation:

To calculate the number of shows to achieve a certain amount of profit you need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= (fixed costs + profit)/contribution margin ratio

contribution margin ratio= (price - unitary variable costs)/price

For the number of shows, divide the Break-even point (dollars) by the selling price