Starlight Theater stages a number of summer musicals at its theater in northern Ohio. Preliminary planning has just begun for the upcoming season, and Starlight has developed the following estimated data.
¹ Represent payments to production companies and are based on tickets sold.
²Costs directly associated with the entire run of each production for costumes, sets, and artist fees.
Starlight will also incur $565,000 of common fixed operating charges (administrative overhead, facility costs, and advertising) for the entire season, and is subject to a 30% income tax rate. If management desires Mr. Wonderful to produce an after-tax contribution of $210,000 toward the firm's overall operating income for the year, total attendance for the production would have to be:

Question

Starlight Theater stages a number of summer musicals at its theater in northern Ohio. Preliminary planning has just begun for the upcoming season, and Starlight has developed the following estimated data.

¹ Represent payments to production companies and are based on tickets sold.
²Costs directly associated with the entire run of each production for costumes, sets, and artist fees.
Starlight will also incur $565,000 of common fixed operating charges (administrative overhead, facility costs, and advertising) for the entire season, and is subject to a 30% income tax rate. If management desires Mr. Wonderful to produce an after-tax contribution of $210,000 toward the firm's overall operating income for the year, total attendance for the production would have to be:

Quizplus · Accepted Answer

The total attendance for Mr. Wonderful would need to be 31,000 to produce an after-tax contribution of $210,000 as shown below.
($18 - $3)A - $165,000 = $210,000 ÷ (1 - .3)
$15 A = $465,000
A = 31,000

Starlight Theater Stages a Number of Summer Musicals at Its