I am unsure how to find break even points and contribution margins with the information given in order to solve the problem. Basically I need to find the break even point in revenue received and in box office receipts but I am unsure how when I feel I am missing much of the equations.
Budget of the movie is 21 million, with 2 contracts offered for the director and stars of the movie:
a. Fixed-salary component of $15 million with no residuals
B. Fixed-salary component of $3million with 15 percent of residuals of the revenue of the film.
Marketers invest $10 million of its own money and gets 25% of box office recipients. the film company receives 62.5% of the total box-office receipts (out of which comes the 25% payment to marketers)