1. 1000 points Stubs-R-Us is a local event ticket broker. Last year, the company

Question

1. 1000 points Stubs-R-Us is a local event ticket broker. Last year, the company sold 910,000 tickets with an average commission of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts. Ofsetting these factors is the observation that the average commission per sale is ikely to increase by 10 percent because the average ticket prices are expected to be larger in the coming year Required: Estimate commission revenues for Stubs-R-Us for the coming year

Explanation / Answer

     37,53,750

Tickets Sold Last Year        9,10,000 Less Fall in Sale @20%        1,82,000 Less Fall due to Change in State @5%            45,500 Revised Sales        6,82,500 Ticket Price 5 Increase in Sales Price @10% 0.5 Revised Sales Price 5.5 Revised Income

     37,53,750

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