Fave Motion Pictures sells movie tickets for $10 per movie patron.Variable costs are $7.50 per movie patron and fixed costs are $50,000 per month.The company's relevant range extends to 35,000 movie patrons per month.What is Fave Motion Pictures' projected operating income if 25,000 movie patrons see movies during a month?

Question

Quizplus · Accepted Answer

B)
Sales $10
Less Variable costs 7.50
= Contribution Margin 2.50 × 25,000 = $62,500
Less Fixed 50,000
Operating Income $12,500

Fave Motion Pictures Sells Movie Tickets for $10 Per Movie