Funday Park competes with Cool World by providing a variety of rides. Funday sells tickets at $70...

Question:

Funday Park competes with Cool World by providing a variety of rides. Funday sells tickets at $70 per person as a one-day entrance fee. Variable costs are $42 per person, and fixed costs are $170,800 per month.

Compute the contribution margin per unit and the number of tickets Funday Park must sell to break even.

Break-even Point:

The Break-even point is the level of sales revenue at which the company will have recovered all of its costs and will be in a no-profit, no-loss situation. It relates to generating enough sales revenue to cover fixed costs.

Answer and Explanation: 1

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Given:

Sales price per unit = $70

Variable cost per unit = $42

Fixed cost = $170,800

Finding:

Contribution margin per unit = Sales price per unit...

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How to Calculate the Break-Even Point - Definition & Formula

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Chapter 5 / Lesson 28
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See how to calculate break-even point (in units and dollars). See the variables of the break-even point formula and examples. Understand the purpose of break-even analysis.


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