2-32 Total costs and unit costs, service setting. The Big Event (TBE) recently started a business organiz- ing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you for an analysis of costs-what costs are fixed, what costs are variable, and so on, for each event. You have the following cost information: Music costs: £10,000 per event Catering costs: Food: £65 per guest Setup/cleanup: £15 per guest Fixed fee: £4,000 per event ISOS, youn 219motau5 of gnite fral pinayni peibnedane M phiqgina 291utxit.a1012 21800 TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form of advertising. This has proved quite effective, and the caterer gives TBE a discount of £5 per guest in exchange for allowing the caterer to advertise. 2900BW 1. Draw a graph depicting fixed costs, variable costs, and total costs for each event versus the number of guests. 000 29uneva 2. Suppose 150 persons attend the next event. What is TBE's total net cost and the cost per attendee? 3. Suppose 200 persons attend the event. What is TBE's total net cost and the cost per attendee?0 .[ 4. How should TBE charge customers for its services? Explain briefly. afsta smooni sdt ensqer9 S
2-32 Total costs and unit costs, service setting. The Big Event (TBE) recently started a business organiz- ing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you for an analysis of costs-what costs are fixed, what costs are variable, and so on, for each event. You have the following cost information: Music costs: £10,000 per event Catering costs: Food: £65 per guest Setup/cleanup: £15 per guest Fixed fee: £4,000 per event ISOS, youn 219motau5 of gnite fral pinayni peibnedane M phiqgina 291utxit.a1012 21800 TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form of advertising. This has proved quite effective, and the caterer gives TBE a discount of £5 per guest in exchange for allowing the caterer to advertise. 2900BW 1. Draw a graph depicting fixed costs, variable costs, and total costs for each event versus the number of guests. 000 29uneva 2. Suppose 150 persons attend the next event. What is TBE's total net cost and the cost per attendee? 3. Suppose 200 persons attend the event. What is TBE's total net cost and the cost per attendee?0 .[ 4. How should TBE charge customers for its services? Explain briefly. afsta smooni sdt ensqer9 S
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...
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