The Houston Armadillos, a minor-league baseball team, play their weekly games in a small stadium just outside Houston. The stadium holds 10,000 people and tickets sell for $10 each. The franchise owner estimates that the team’s annual fixed expenses are $180,000, and the variable expense per ticket sold is $1. (In the following requirements, ignore income taxes.) Required:1. Draw a cost-volume-profit graph for the sports franchise. Label the axes, break-even point, profit and loss areas, fixed expenses, variable expenses, total-expense line, and total-revenue line.2. If the stadium is half full for each game, how many games must the team play to break even?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Houston Armadillos, a minor-league baseball team, play their weekly games in a small stadium just outside Houston. The stadium holds 10,000 people and tickets sell for $10 each. The franchise owner estimates that the team’s annual fixed expenses are $180,000, and the variable expense per ticket sold is $1. (In the following requirements, ignore income taxes.)

Required:
1. Draw a cost-volume-profit graph for the sports franchise. Label the axes, break-even point, profit and loss areas, fixed expenses, variable expenses, total-expense line, and total-revenue line.
2. If the stadium is half full for each game, how many games must the team play to break even?

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