Problem A: The Accounting Society at So. Cal. University is planning its annual fundraising extravaganza, the Bean Counter's Ball. The AS expects to charge $100 per ticket. The following projected costs were culled from last year's ball [with 200 attendees] and updated to reflect current costs: 1 Prime Rib Dinners 2 Party Favors 3 Programs 4 Orchestra 5 Advertising 6 Commemorative Tickets 7 Beverly Wilshire Ballroom Rent 8 Dinner Time Entertainment Total ■ 6,000 30.00 400 2.00 600 3.00 4,000 20.00 1,000 5.00 500 2.50 50.00 12.50 10,000 2,500 Costs - 1, 2, 3: These costs have been obtained using competitive bids based on number ordered. Each requires a minimum order of 150 and the actual number must be communicated to vendors 5 days prior to the event. Costs -4,7,8: These costs are fixed fee and must be booked far in advance. Costs - 6: Tickets are purchased in a block and include this year's date, theme, unique design, and logo. ■ Unit Required: 1. Use the information above to prepare a contribution approach income statement. 2. Use the information in #1 to calculate the following: a. Break-even in tickets and sales dollars. b. Net income if- 150, 250, or 300 were sold. c. Number of tickets that must be sold in order to earn - $10,000, $25,000, $50,000. d. Assume 200 attendees, calculate price per ticket to earn $10,000, $25,000, $50,000. 3. The Dance committee is very concerned given your analysis and has proposed the following changes in attempt to increase the profitability of the Ball: Instead of individual dinners, a delicious buffet will be catered by Chano's Fine Foods. Costs will be $1,000 for attendance of 200-300, $1,500 for 301 to 400 patrons, $2,000 for 401 to 500 patrons, and a $500 for each increase of 100 patrons.. Party favors will be eliminated and programs will copied at Kinko's at a cost of $1 each. The orchestra and dinner entertainment will be replaced by Tito's Party Time DJ. Projected cost $200. Since his parents are on vacation, Ron has offered to host the Ball at their house for a nominal gratuity of $500. All other costs will remain the same. The costs of tickets will be reduced to $30 each and 350 people are expected to attend. a. Prepare a new contribution approach income statement.

Problem A: The Accounting Society at So. Cal. University is planning its annual fundraising extravaganza, the Bean Counter's Ball. The AS expects to charge $100 per ticket. The following projected costs were culled from last year's ball [with 200 attendees] and updated to reflect current costs: 1 Prime Rib Dinners 2 Party Favors 3 Programs 4 Orchestra 5 Advertising 6 Commemorative Tickets 7 Beverly Wilshire Ballroom Rent 8 Dinner Time Entertainment Total ■ 6,000 30.00 400 2.00 600 3.00 4,000 20.00 1,000 5.00 500 2.50 50.00 12.50 10,000 2,500 Costs - 1, 2, 3: These costs have been obtained using competitive bids based on number ordered. Each requires a minimum order of 150 and the actual number must be communicated to vendors 5 days prior to the event. Costs -4,7,8: These costs are fixed fee and must be booked far in advance. Costs - 6: Tickets are purchased in a block and include this year's date, theme, unique design, and logo. ■ Unit Required: 1. Use the information above to prepare a contribution approach income statement. 2. Use the information in #1 to calculate the following: a. Break-even in tickets and sales dollars. b. Net income if- 150, 250, or 300 were sold. c. Number of tickets that must be sold in order to earn - $10,000, $25,000, $50,000. d. Assume 200 attendees, calculate price per ticket to earn $10,000, $25,000, $50,000. 3. The Dance committee is very concerned given your analysis and has proposed the following changes in attempt to increase the profitability of the Ball: Instead of individual dinners, a delicious buffet will be catered by Chano's Fine Foods. Costs will be $1,000 for attendance of 200-300, $1,500 for 301 to 400 patrons, $2,000 for 401 to 500 patrons, and a $500 for each increase of 100 patrons.. Party favors will be eliminated and programs will copied at Kinko's at a cost of $1 each. The orchestra and dinner entertainment will be replaced by Tito's Party Time DJ. Projected cost $200. Since his parents are on vacation, Ron has offered to host the Ball at their house for a nominal gratuity of $500. All other costs will remain the same. The costs of tickets will be reduced to $30 each and 350 people are expected to attend. a. Prepare a new contribution approach income statement.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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I need some assistance with question 3 of this paper using the information on the document provided to prepare a contribution approach income statement.

Transcribed Image Text:PROBLEM SET #12: CVP Analysis Problem A: The Accounting Society at So. Cal. University is planning its annual fundraising extravaganza, the Bean Counter's Ball. The AS expects to charge $100 per ticket. The following projected costs were culled from last year's ball [with 200 attendees] and updated to reflect current costs: ☐ ■ ■ Costs 1, 2, 3: These costs have been obtained using competitive bids based on number Each requires a minimum order of 150 and the actual number must be communicated to vendors 5 days prior to the event. ordered. Costs -4,7,8: These costs are fixed fee and must be booked far in advance. 1 Prime Rib Dinners 2 Party Favors 3 Programs 4 Orchestra Costs - 6: Tickets are purchased in a block and include this year's date, theme, unique design, and logo. Required: 1. Use the information above to prepare a contribution approach income statement. ■ 5 Advertising 6 Commemorative Tickets 7 Beverly Wilshire Ballroom Rent 8 Dinner Time Entertainment 2. Use the information in #1 to calculate the following: a. Break-even in tickets and sales dollars. b. Net income if- 150, 250, or 300 were sold. c. Number of tickets that must be sold in order to earn - $10,000, $25,000, $50,000. d. Assume 200 attendees, calculate price per ticket to earn $10,000, $25,000, $50,000. ■ Total Unit 6,000 30.00 400 2.00 600 3.00 11 4,000 20.00 1,000 5.00 500 2.50 10,000 50.00 2,500 12.50 3. The Dance committee is very concerned given your analysis and has proposed the following changes in attempt to increase the profitability of the Ball: Instead of individual dinners, a delicious buffet will be catered by Chano's Fine Foods. Costs will be $1,000 for attendance of 200-300, $1,500 for 301 to 400 patrons, $2,000 for 401 to 500 patrons, and a $500 for each increase of 100 patrons.. Party favors will be eliminated and programs will copied at Kinko's at a cost of $1 each. The orchestra and dinner entertainment will be replaced by Tito's Party Time DJ. Projected cost $200. ■ ■ ▪ Since his parents are on vacation, Ron has offered to host the Ball at their house for a nominal gratuity of $500. All other costs will remain the same. The costs of tickets will be reduced to $30 each and 350 people are expected to attend. a. Prepare a new contribution approach income statement. b. Calculate the new break-even in tickets and sales dollars. c. Calculate profits if-300, or 450 people attended. d. Assuming 350 attendees, calculate ticket price to earn $20,000 and $50,000

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