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Homework answers / question archive / Hickory Point Amusement Park sells admission tickets for $50 per person for one visit
Hickory Point Amusement Park sells admission tickets for $50 per person for one visit. Variable costs are $15 per visitor and fixed costs are $60,000,000 per month. The company's relevant range extends to 2,000,000 visitors per month. What is Hickory Point's projected operating income if 1,750,000 visitors come to the park during the month?
A) $1,250,000
B) $61,250,000
C) $87,500,000
D) $27,500,000
Answer: A
Explanation: A)
Sales $50
Less Variable costs 15
= Contribution Margin 35 × 1,750,000 = 61,250,000
Less Fixed 60,000,000
Operating Income $1,250,000