Read the case in the attachment file and answer question 2.
Using the budget prepared in Question 1:
Identify each cost as variable, fixed, or step in relation to tickets sold. Hint: Determine the weighted average ticket price and contribution margin from the sales mix information (percentage of adult tickets vs. percentage of student and senior tickets).
In the first case, assume that all funds are to come from ticket sales only and that there are four shows in total. Compute the breakeven point in number of tickets to be sold and in U.S. dollars.
In the second case, assume the same in (b) but only three shows in total. Compute the breakeven point in number of tickets to be sold and in U.S. dollars.
In the third case, assume that SETU would receive sponsorship funds (cash and in-kind donations) in addition to ticket sales for four shows. Compute the breakeven point in number of tickets to be sold and in U.S. dollars.
In the fourth case, assume that SETU would receive sponsorship funds (cash and in-kind donations) in addition to ticket sales for three shows. Compute the breakeven point in number of tickets to be sold and in U.S. dollars.
Comment on the feasibility of the required number of ticket sales computed from above, keeping in mind the nature of the play, that it is staged by a community theater organization, and the ethnicity aspect. Suggest ways for SETU to achieve the necessary amount of ticket sales.
