The following information is available to Arena Events Ltd who are preparing their budget for 2021: 1. The average sales price for 2021 will be £30 per ticket for an event. 2. 100% event occupancy is set at 48,000 seats (tickets) per annum 3. Event staff variable costs would be £9.50 per ticket. 4. Variable overheads would be £3.50 per ticket- these are the costs of hospitality welcome packs including a free meal and drink. 5. The relationship between semi variable costs and number of tickets sold will be consistent with that over the last 6 years: Yearly direct labour semi variable Costs (E) Tickets 2015 32,000 40,000 2016 30,000 38,000 2017 42,000 41,000 2018 39,000 39,500 2019 41,000 43,000 40,500 2020 43,200 6. Fixed costs for the 2021 year are expected to be;- Depreciation 120,000 Maintenance 12,000 Insurance Site Cleaning Office Salaries 145,000 42,000 150,000

The following information is available to Arena Events Ltd who are preparing their budget for 2021: 1. The average sales price for 2021 will be £30 per ticket for an event. 2. 100% event occupancy is set at 48,000 seats (tickets) per annum 3. Event staff variable costs would be £9.50 per ticket. 4. Variable overheads would be £3.50 per ticket- these are the costs of hospitality welcome packs including a free meal and drink. 5. The relationship between semi variable costs and number of tickets sold will be consistent with that over the last 6 years: Yearly direct labour semi variable Costs (E) Tickets 2015 32,000 40,000 2016 30,000 38,000 2017 42,000 41,000 2018 39,000 39,500 2019 41,000 43,000 40,500 2020 43,200 6. Fixed costs for the 2021 year are expected to be;- Depreciation 120,000 Maintenance 12,000 Insurance Site Cleaning Office Salaries 145,000 42,000 150,000

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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