Stubs-R-Us is a local event ticket broker. Last year, the company sold 940,000 tickets with an average commission of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts. Offsetting these factors is the observation that the average commission per sale is likely to Increase by 5 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year. > Answer is complete but not entirely correct. Commission revenues $ 3,701,250 X
Stubs-R-Us is a local event ticket broker. Last year, the company sold 940,000 tickets with an average commission of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts. Offsetting these factors is the observation that the average commission per sale is likely to Increase by 5 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year. > Answer is complete but not entirely correct. Commission revenues $ 3,701,250 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Stubs-R-Us is a local event ticket broker. Last year, the company sold 940,000 tickets with an average commission
of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition,
employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters
relocated to another state and all the employees closed their accounts.
Offsetting these factors is the observation that the average commission per sale is likely to Increase by 5 percent
because the average ticket prices are expected to be larger in the coming year.
Required:
Estimate commission revenues for Stubs-R-Us for the coming year.
> Answer is complete but not entirely correct.
Commission revenues
$ 3,701,250 X
Transcribed Image Text:tickets sold
less-decline
less-relocation
total tickets
940000
-188000
-47000
705000
$5
105%
$5.25
$3,701,250.00
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