LaComedia Dinner Theater sells tickets for dinner and a show for $40 each

Accounting Feb 27, 2021

LaComedia Dinner Theater sells tickets for dinner and a show for $40 each. The cost of providing dinner is $26 per ticket and the fixed cost of operating the theater is $100,000 per month. The company can accommodate 12,000 patrons each month. What is the projected monthly income if 10,000 patrons visit the theater each month?

A) $68,000

B) $140,000

C) $240,000

D) $40,000

Expert Solution

Answer: D

Explanation: D)

Sales $40

Less Variable costs 26

= Contribution Margin 14 × 10,000 = $140,000

Less fixed = 100,000

Operating Income $40,000

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