The Settler's Chuck Wagon sells tickets for dinner and a show for $50 each

Accounting Feb 27, 2021

The Settler's Chuck Wagon sells tickets for dinner and a show for $50 each. The cost of providing dinner is $23 per ticket and the fixed cost of operating the theater is $115,000 per month. The company can accommodate 13,500 patrons each month. What is the projected monthly income if 5,500 patrons visit the theater each month?

A) $263,500

B) $148,500

C) $249,500

D) $33,500

Expert Solution

Answer: D

Explanation: D)

Sales $50

Less Variable costs 23

= Contribution Margin 27 × 5,500 = $148,500

Less fixed = 115,000

Operating Income $33,500

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