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# Break Even and More

"A couple of entrepreneurial business students at State University decided to put their education into practice by developing a tutoring company for business students. While private tutoring was offered, it was determined that group tutoring before tests in the large statistics classes would be most beneficial. The students rented a room close to campus for \$300 for 3 hours. They developed handouts based on past tests, and these handouts (including color graphs) cost \$5 each. The tutor was paid \$25 per hour, for a total of \$75 for each tutoring session.

(a) If students are charged \$20 to attend the session,
how many students must enroll for the company to break even?

(b) A somewhat smaller room is available for \$200 for 3 hours. The company is considering this possibility. How would this affect the break-even point?"

"Golden Age Retirement Planners specializes in providing financial advice for people planning for a comfortable retirement. The company offers seminars on the important topic of retirement planning. For a typical seminar, the room rental at a hotel is \$1,000, and the cost of advertising and other incidentals is about \$10,000 per seminar. The cost of the materials and special gifts for each attendee is \$60 per person attending the seminar. The company charges \$250 per person to attend the seminar as this seems to be competitive with other companies in the same business. How many people must attend each seminar for Golden Age to break even?"

Katherine D'Ann, from Problem 1-17, has become concerned that sales may fall, as the team is on a terrible losing streak, and attendance has fallen off. In fact, Katherine believes that she will sell only 500 programs for the next game. If it was possible to raise the selling price of the program and still sell 500, what would the price have to be for Katherine to break even by selling 500?

1-17 is below
"Katherine D'Ann is planning to finance her college education by selling programs at the football games for State University. There is a fixed cost of \$400 for printing these programs, and the variable cost is \$3. There is also a \$1,000 fee that is paid to the university for the right to sell these programs. If Katherine was able to sell programs for \$5 each, how many would she have to sell in order to break even?")

#### Solution Summary

The solution determines the break even point along with other similar questions.

\$2.19