Question

Who Done It Mystery Theater sells tickets for dinner and a show for $ 40 each. The cost of providing dinner is $ 22 per ticket and the fixed cost of operating the theater is $ 70 comma 000 per month. The company can accommodate 15 comma 000 patrons each month. What is the contribution margin per​ patron?

Answer 1

$18

Step-by-step explanation:

The contribution margin per patron is the ratio of the total contribution to the number of patrons. The total contribution is the difference between the total sales and the total variable cost.

Hence, the contribution per matron may also be derived as the difference between the sales per patron and the variable cost per patron.

The variable cost here is the cost of providing dinner per ticket as such,

Contribution margin per patron

= $40 - $22

= $18