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 Hickory Point Amusement Park sells admission tickets for $50 per person for one visit

Accounting

 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

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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

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