Chi Omega Sorority is planning its annual Riverboat Extravaganza. The Extravaganza committee has assembled the following expected costs for the event: Dinner (per person) . . . . . . . . . . . . . . . . . . . . . $7 Favors and program (per person) . . . . . . . . . . . $3 Band . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500 Tickets and advertising . . . . . . . . . . . . . . . . . . . $700 Riverboat rental . . . . . . . . . . . . . . . . . . . . . . . . $4,800 Floorshow and strolling entertainers . . . . . . . . . . $1,000 The committee members would like to charge $30 per person for the evening’s activities. Required: Compute the break-even point for the Extravaganza (in terms of the number of persons that must attend). Assume that only 250 persons attended the Extravaganza last year. If the same number attend this year, what price per ticket must be charged to break even? Refer to the original data ($30 ticket price per person). Prepare a CVP graph for the Extravaganza from zero tickets up to 600 tickets sold.
Chi Omega Sorority is planning its annual Riverboat Extravaganza. The Extravaganza committee has assembled the following expected costs for the event:
Dinner (per person) . . . . . . . . . . . . . . . . . . . . . $7
Favors and program (per person) . . . . . . . . . . . $3
Band . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,500
Tickets and advertising . . . . . . . . . . . . . . . . . . . $700
Riverboat rental . . . . . . . . . . . . . . . . . . . . . . . . $4,800
Floorshow and strolling entertainers . . . . . . . . . . $1,000
The committee members would like to charge $30 per person for the evening’s activities.
Required:
- Compute the break-even point for the Extravaganza (in terms of the number of persons that must attend).
- Assume that only 250 persons attended the Extravaganza last year. If the same number attend this year, what price per ticket must be charged to break even?
- Refer to the original data ($30 ticket price per person). Prepare a CVP graph for the Extravaganza from zero tickets up to 600 tickets sold.
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Refer to the original data ($30 ticket price per person). Prepare a Cost –
Volume – Price (CVP) graph for the Extravaganza from a zero level of activity
up to 600 tickets sold. Number of persons should be placed on the horizontal
(X) axis, and dollars should be placed on the vertical (Y) axis
4. Write two pros and two cons associated with the use of the Break even
analysis as a planning tool.
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