This is a REAL WORLD SCENARIO (Please use relevant, realistic numbers--think of

Question

This is a REAL WORLD SCENARIO (Please use relevant, realistic numbers--think of this as an actual /true scenario)

You are in a business that organizes parties. You are planning to host a Halloween Party.

1.Come up with a creative name and theme for the party.

2.List all the expenses that you would incur on this party. Classfiy those expenses as fixed or variable.

3. Determine the amount you would charge as entry fees

4. Determine the number of people you would need to break even.

5. Determine the number of people you expect at the party.

6. Determine your profit.

Please show relevant calculations!!

Please use realistic dollar amounts for the expenses and ticket rates. Also, be specific in terms of venue (example: Ball Room at the Taj Boston).

Explanation / Answer

(1) Name of the party : Halloween New year party

Theme : Celebrating New year musical extravaganza.

(2) Fixed expenses : (i) Rent of the Party Hall (Vanue/space rental charges) (ii) Lighting charges (iii) Decoration charges (iv) Host charges (v) Ticket price (vi) Payments to ushers and performers (vii ) Staffing cost (viii) Marketing cost   

Variable expanses : (i) Snacks for guests and return gifts (ii) Amounts set for extra expenditures ( unexpected)

The sum of both expenses will be the total cost set for the party.

(iii) The entry fee should not be so higher that will effect the gathering of guest and should not be so low that result an unexpected gathering. So a fixed amount per person will be set as $63 and variable cost is fixed as $ 47, so the total price of the ticket will be set as $ 110 per person.

(iv) We schedule a party to have 200 people that would attend the party , that we need to break even.

(v) We expect to have total 250 people at the party. over all.

(vi ) So for break even, total cost = $110 x 200 = $ 22000

and total earning by 250 people that actually attend the party = $110 x 250 = $27500

So total profit = $27500 - $22000 = $ 5500

That is last required answer.

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