Solve the problem.
-Steve invests in a circus production. The cost includes an overhead of $54,000, plus production costs of $4000 per performance. A sold-out performance brings in $13,000. Determine the dollar amount coming
In and going out at the break-even point.
A)$78,000
B)$24,000
C)$6
D)$41,294

Question

Quizplus · Accepted Answer

At the break-even point, the amount coming in equals the amount going out. The overhead cost is $54,000, and each performance costs $4,000. To break even with each performance bringing in $13,000, we calculate the number of performances needed to cover the overhead. Let $x$ be the number of performances. The equation is $54,000 + 4,000x = 13,000x$. Solving for $x$ gives the number of performances needed to break even, but the question asks for the dollar amount at the break-even point, which includes the overhead and the total cost of all performances at the break-even point. The total revenue at break-even is also the total cost at break-even, which is the sum of the overhead and the production costs for the number of performances needed to break even. Given the overhead ($54,000) and the cost per performance ($4,000), and knowing each performance brings in $13,000, we find the break-even point in terms of money, not the number of performances. Since the overhead is a fixed cost and the cost per performance is variable, the total costs and total revenue at break-even are equal. The correct calculation involves finding the total costs (fixed + variable) at the point where they equal total revenue, but the provided options and the question setup lead to a misunderstanding of the calculation process. The correct approach to find the break-even point in terms of dollars directly from the given options is not clearly outlined in the question, but the closest answer reflecting the concept of total costs and revenues equating at break-even would involve calculating the total amount of money involved in reaching that point. However, without directly calculating the number of performances to break even, the provided options and explanation lead to a misunderstanding. The correct answer, based on the understanding that the break-even point involves equating total costs with total revenues, would theoretically be the total amount of money that has been circulated (both costs and revenues) up to that point, but the given options do not directly reflect the proper calculation for this scenario.

Solve the Problem. -Steve Invests in a Circus Production. the Cost Includes an Cost