I basically just want to understand how to find the variable cost and sales which is required to know the contribution margin from the information below. I eventually need to figure out the break even point in terms of revenue and box office receipts.Pioneer Films has just finished a production of Sharknado 5, the latest action film directed by John Favreau and starring Ian Ziering, Tara Reid and George Clooney. The total production cost was $5million. All the production personnel and actors on Sharknado 5 received a fixed salary (included in the $5 million) and will have no “residual” (equity interest) in the revenues or operating income from the movie. Daniels Communications will handle the marketing of Sharknado 5. Daniels agrees to invest a minimum of $3 million of its own money in marketing the movie and will be paid 20% of the revenues Pioneer itself receives from the box-office receipts. Pioneer receives 62.5% of the total box-office receipts (out of which comes the 20% payment to Daniels)
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