Question

Chapter 5 Exercises i Saved Required information [The following information applies to the questions displayed below.] Part 1 of 2 The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event: 10 points eBook Dinner (per person) Favors and program (per person) Band Rental of ballroom Professional entertainment during intermission Tickets and advertising $ 17 $ 3 $ 600 $ 200 $ 400 $ 800 Print References The committee members would like to charge $30 per person for the evening's activities. Required: 1. What is the break-even point for the dinner-dance in terms of the number of persons who must attend)? 2. Assume that last year only 100 persons attended the dinner-dance. If the same number attend this year, what price per ticket must be charged in order to break even? persoll 1. Break-even point Ticket price per person to 4. break even

Answer 1

1)
	Variable cost per person
	Dinner	$               17
	Favors and program	$                 3
	Total	$               20
	Fixed cost for an event
	Band	$             600
	Retail of ballroom	$             200
	Professional Entertainment during intermission	$             400
	ticketing and advertising	$             800
	Total	$         2,000
	Contribution Margin Per Unit = Sales price - variable cost per unit
	= $30-20
	= $10 per person
	Break-even Point In Persons = Fixed Cost/ Contribution Margin Per person
	= $2000/10
	=200 persons
2)	Price to be charged for 100 persons in order to break even
	The price should be charged as such that total contribution margin
	is equal to total fixed cost
	Fixed cost = (number of persons * price per person) - (number of persons * variable cost per person)
	$2000 = (100* Price )- (100*$20)
	$2000 = (100* price) -$2000
	$4000 = 100* price
	Price per person = $4000/100
	Price per person = $40
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