8.19
CVP, cost structure differences, movie production.
(20 min)
1
a Contract
A
Fixed costs for Contract A
Production costs
€21,000,000 Fixed salary
15,000,000 Total fixed costs
€36,000,000 Unit variable cost = €0.25 per €1 revenue marketing fee Unit contribution margin = €0.75 per €1 revenue
Box-office receipts of €76,800,000 translate to €48,000,000 in revenues to Espasso.
2
[AQ8]
b Contract
B
Fixed costs for Contract B
Production costs
€21,000,000 Fixed salary
3,000,000 Total fixed costs
€24,000,000 Unit variable cost = €0.25 per €1 revenue fee to Artes e Media
€0.15 per €1 revenue residual to director/actors
€0.40 per €1 revenue Unit contribution margin = €0.60 per €1 revenue
Breakeven points in revenues =
€24,000,000
€0.60
= €40,000,000
Box-office receipts of €64,000,000 translate to €40,000,000 in revenues to Espasso.
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 Share with your friends: |
