A Theater is interested in estimating fixed and variable costs. The following data are available

A Theater is interested in estimating fixed and variable costs. The following data are available:

 

                                          Total Cost         No. of Tickets Sold

January                            $172,000                          20,000

February                         $176,000                          19,500

March                               $180,500                          25,500

April                                  $170,500                          21,500

May                                   $190,000                          25,000

June                                   $188,000                          26,500

 

Use regression analysis to estimate fixed cost per month and variable costs per ticket sold, show your output and answer the following questions:

 

REQUIRED:

a.      
How much is the variable cost per ticket?

b.     
How much is total fixed cost?

c.      
What percentage of variance in Total Cost is explained by the number of tickets sold ?

d.     
Write the total cost equation in good form.

e.      
MovieTown Theater is considering an advertising campaign that is expected to increase annual sales by 7,000 tickets. Assume that the ticket selling price is $9. What is the expected increase in profit associated with the advertising campaign?