British Productions performs London shows. The average show sells 1,300 tickets at $60 per ticket. There year. No additional shows can be held as the theater is also used by other production companies. The avera cast of 65, each earning a net average of$340 per show. The cast is paid after each show. The other variable program-printing cost of $8 per guest. Annual fixed costs total$728,000 ticket. There are 110 shows per companies. The average show has a show. The other variable cost is a Read the requirements Requirement 1. Compute revenue and variable costs for each show. Use the following formula to compute sales revenue for each show. Net sales revenue per unit X Number of units sold = Sales revenue per show 60 1,300 = $78,000 Now compute the variable costs for each show. You will need to compute the variable costs per show for the cost of parame and the cost of performers separately, and then compute the total variable costs per show. Variable costs per unit X Number of units Variable costs per show Cost of programs$ 8 per program * 1,300 programs = $10,400 Cost of performers$ 340 per show * 65 performers S 22,100 Total variable costs 32,500 Requirement 2. Use the equation approach to compute the number of shows British Productions must perform each year to break even. Cost-volume-profit (CVP) analysis is a planning tool that looks at the relationship among costs and volume and how they affect profits (or losses). CVP analysis can be used to estimate the amount of sales needed to achieve a target profit. Target profit is the operating income that results when sales revenue minus variable and fixed costs equals management's profit goal Companies can use the equation approach to compute required sales in terms of units as follows: • Net sales revenue - Variable costs - Fixed costs Target profit A variation of this target profit calculation is the breakeven point calculation. The breakeven point is the sales level at which the company does not earn a profit or a loss, but has an operating income of zero. It is the point at which total revenues equal tota costs. Thus, when computing the breakeven point in units (shows), we will set the "Target profit amount to be so In Requirement 1, we computed the net sales revenue and the total variable costs per show. We are given the annuale costs for British Productions. If the company desires to break even, how many shows must British Productions per British Productions perform each year? Using the formula for the equation approach below, enter the fixed costs into the equation Net sales revenue Total variable costs Target per show - per show ) x Number of shows costs + prom $78,000 -$ 32,500 ) x Number of shows - $728,000 +$ 0 Fixed ide of the equation to compute the required Now use the rearranged formula, which isolates the number of shows to one side of the equation to number of shows to break even Fixed Net sales revenue Total variable costs Number of shows costs 1 per show per show ) to break even $728,000 1$ 78,000 $32,500 Requirement 3. Use the contribution margin ratio approach to compute the number of shows of$5,687,500. Is this profit goal realistic? Give your reasoning Ber of shows needed each year to earn a profit https://xlitemprod.pearsoncmg.com/api/v1/print/accounting 11/8 2019