The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-danc

Question

The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event:

30

3

1,260

630

1,260

3,150

The committee members would like to charge $54 per person for the evening’s activities.

Exercise 5-16 Part 1

Required:

1. What is the break-even point for the dinner-dance (in terms of the number of persons who must attend)?

2. Assume that last year only 200 persons attended the dinner-dance. If the same number attend this year, what price per ticket must be charged in order to break even?

Dinner (per person) $

30

Favors and program (per person) $

3

Band $

1,260

Rental of ballroom $

630

Professional entertainment during intermission $

1,260

Tickets and advertising $

3,150

Explanation / Answer

a) Break even = Fixed cost/contribution margin per unit

= 6300/(54-33)

Break even = 300 persons

b) Break even = Fixed cost/Contribution margin per unit

200 = 6300/(X-33)

200X-6600 = 6300

X = 64.50 per ticket

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