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Break-Even Point for an Off-Broadway Theater

Letitia Green own a small, independent off-Broadway theater. Her theater is about to begin performing a new play titled "Franklin County Blues." Letitia has invested her own funds to get the play off the ground, and wants to know how many tickers need to be sold before the theater breaks even. Information about the play follows:

<please see the attached file>

A) How many performances must be put on before the theater breaks even? (Assume that each performance will be sold out).

B) Letitia believes that the arts should be accessible to everyone, so she has decided to change the price structure for the play. If she offers 50 tickets at a reduced rate of $10 per ticket, and the other 250 tickets at $42 per ticket, how many performances would be necessary to break even?

C) Suppose instead that, based on past experience, Letitia anticipates there will only be enough demand for eight performances of the play. Although the play would not break even, what other factors might cause Letitia to go ahead with the production?

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Solution Summary

This solution provides a PDF with step-by-step instructions on using break-even point analysis to see the break-even point for a theater under two scenarios.