Hyundai Automobile U.S.A. is sponsoringa charity golf tournament to raise monies for achildren’s hospital in Birmingham. There are twopossible venues:• RTJ Golf Resort at Prattville, which has afixed rental cost of $6,810. The hotel providesfor meals and waiters and waitresses to servedrinks and finger foods at $60 per person. Thegreen fees and cart for each person will be $35.• Wynlakes Golf & Country Club, which has afixed rental cost of $2,400 plus a charge of $100per person for its own catering of meals andserving of drinks and finger foods. The greenfees and cart for each person will be $40.Hyundai budgets $5,000 in costs for administrationand marketing for the event. The band will cost afixed amount of $3,000. Tickets to this local community event will be $300 per person. All proceedsfrom the event will be donated to the children’shospital.(a) Compute the break-even point for each venue interms of tickets sold.(b) At what level of tickets sold will the two venueshave the same operating income?
Hyundai Automobile U.S.A. is sponsoring
a charity golf tournament to raise monies for a
children’s hospital in Birmingham. There are two
possible venues:
• RTJ Golf Resort at Prattville, which has a
fixed rental cost of $6,810. The hotel provides
for meals and waiters and waitresses to serve
drinks and finger foods at $60 per person. The
green fees and cart for each person will be $35.
• Wynlakes Golf & Country Club, which has a
fixed rental cost of $2,400 plus a charge of $100
per person for its own catering of meals and
serving of drinks and finger foods. The green
fees and cart for each person will be $40.
Hyundai budgets $5,000 in costs for administration
and marketing for the event. The band will cost a
fixed amount of $3,000. Tickets to this local community event will be $300 per person. All proceeds
from the event will be donated to the children’s
hospital.
(a) Compute the break-even point for each venue in
terms of tickets sold.
(b) At what level of tickets sold will the two venues
have the same operating income?
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