he Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance
ID: 2393612 • Letter: H
Question
he Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event:
Compute the break-even point for the dinner-dance (in terms of the number of persons who must attend).
Assume that last year only 250 persons attended the dinner-dance. If the same number attend this year, what price per ticket must be charged in order to break even? (Round your answer to 2 decimal places.)
he Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event:
Explanation / Answer
Solution: 1. Break-even point 250 persons Working Notes: Price per ticket $45 Less: Variable expenses Dinner $12 Favors and program $7 $19 Contribution margin per person $26 Total fixed expenses = Band + Rental of ballroom + Professional entertainment during intermission + Tickets and advertising Total fixed expenses = $900 + $2,200 + $2,700 + $700 Total fixed expenses = $6500 Break-even point = Total fixed expenses / Contribution margin per person Break-even point = $6500 /$26 Break-even point = 250 Persons 2. Ticket price per person to break even 45.00 Working Notes: Variable cost per person $19 [$12 + $ 7] Fixed cost per person $26 [total fixed expenses $6,500 /250 persons = $ 26] Ticket price per person to break even $45 Notes: In above calculation in 1. above break even point is 250 persons, so for 2nd $45 the current ticket price will be break even price at 250 persons. Break even price is the price at which , both fixed and variable expenses cost is recovered at that price. Please feel free to ask if anything about above solution in comment section of the question.
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