The Boys Club is planning its annual barnyard dinner dance. Expected costs for t
ID: 2466307 • Letter: T
Question
The Boys Club is planning its annual barnyard dinner dance. Expected costs for the event fol
The Boys Club is planning its annual barnyard dinner dance. Expected costs for the event follows:
Dinner – per person 18
Favors and program – per person 2
Band $ 2,800
Barnyard rental 900
Professional entertainment (during intermission) 1,000
Tickets and advertising 1,300
The club would like to charge $ 35 per person for the evening’s activities.
How many people must attend for the club to break even?
Presume that last year only 300 people attended the barnyard dinner dance. If the same number attended this year, what price per ticket must be charged in order to break even?
lows:
Explanation / Answer
(1) people must attend for the club to break even :
Break even point in units = fixed cost / (price - variable cost)
= (2800 +900 + 1000 + 1300 ) / [35 - (18 + 2)]
= $6000 / $15
= 400 people
Note:- Dinner cost and Favour and program cost are per person that is these costs wil vary according to the people coming in the activity ,Therefore, these are Variable cost
Fixed cost ( band , Barnyard rebtal , professional entertainment and Tickets and Advertising ) are fixed, it will have to be incurred irrespect of the number of people coming.
price per ticket must be charged in order to break even if 300 people attented :
300 people = $6000 / [price - ($18+$2)]
300 = $6000 /price - $20
300 price - 6000 = 6000
300 price = 12000
price = $40 per person
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