Question

Who Done It Mystery Theater sells tickets for dinner and a show for $ 60 each. The cost of providing dinner is $ 33 per ticket and the fixed cost of operating the theater is $ 100 comma 000 per month. The company can accommodate 11 comma 000 patrons each month. What is the projected monthly income if 5 comma 000 patrons visit the theater each​ month?

Answer 1

Answer:

Income = $35,000

Explanation:

We calculate the income simply as follows,

Total Revenue from 5000 patrons   (60*5000)              $300,000

Total Diner cost of 5000 patrons (33*5000)                   $165,000

Total Cost of operating the Theater                                 $100,000

Projected Income for the period                                       $35,000/month

Projected income thus is $35,000. Although there is excess capacity we only match revenues of the actual tickets sold to the expenses.

Hope that helps.