7)Corp is holding a fundraising banquet. He has two options for the banquet: OPTION one: a. Fixed rental cost of $1,000 b. $12 per person for food OPTION two: a. Fixed rental cost of $3,000 b. A caterer who charges $8.00 per person for food It has budgeted $1,800 for administrative and marketing expenses. He will hire a band which will cost another $800. Tickets will be $30 per person. Which option provides the greatest operating income if 600 people attend? 8) How many people would need to attend such that the costs for the two options are the same?

7)Corp is holding a fundraising banquet. He has two options for the banquet: OPTION one: a. Fixed rental cost of $1,000 b. $12 per person for food OPTION two: a. Fixed rental cost of $3,000 b. A caterer who charges $8.00 per person for food It has budgeted $1,800 for administrative and marketing expenses. He will hire a band which will cost another $800. Tickets will be $30 per person. Which option provides the greatest operating income if 600 people attend? 8) How many people would need to attend such that the costs for the two options are the same?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

7)Corp is holding a fundraising banquet. He has two options for the banquet:
OPTION one:
a. Fixed rental cost of $1,000
b. $12 per person for food
OPTION two:
a. Fixed rental cost of $3,000
b. A caterer who charges $8.00 per person for food
It has budgeted $1,800 for administrative and marketing expenses. He will hire a band which will cost
another $800. Tickets will be $30 per person. Which option provides the greatest operating income if 600
people attend?
8) How many people would need to attend such that the costs for the two options are the same?

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