Mastery Problem: Breakeven Analysis
Procrastinators Anonymous (PA) is hosting their annual convention this coming year in Dallas, TX. Although this is not typical of this organization, they wish to plan ahead to determine what the cost of the keynote banquet ticket should be. The ticket cost then can be included in materials that will be sent out prior to the convention.
The banquet coordinator has determined the following costs:
Rental of banquet facility $2,500
Entertainment for banquet $1,200
Printing costs $500
Cost of meal $12
Favors per attendee $2
1. Given the above information and assuming no profit will be made, what ticket price should be set if 500 procrastinators attend? If 750 people attend?
2. If a ticket price of $35 is set, how many procrastinators need to attend for PA to break even on their banquet? If the ticket price was $50? Use the roundup function to round up to the next integer (eg. 344.24 would be 345)
3. If fixed costs can be reduced by 10%, what is the breakeven point (in number of attendees) if the ticket price is $35. Use the roundup function to round up to the next integer.
4. If PA wishes to make a profit of $1,000 on the banquet and the ticket price is $35, how many procrastinators need to attend? Assume that fixed costs do not change from the initial amounts. Use the roundup function to round up to the next integer.
a. How many attendees need to attend for the banquet to net EXACTLY $955 in profit (assuming $35 ticket price)? Format attendees to 5 decimal places.
b. For a breakeven, what should be the EXACT ticket price (do not round) if EXACTLY 455 attendees show up at the banquet. Format the ticket price to 5 decimal places.
See the attached file for the calculations.
1. Given the above information and assuming no profit will be made, what ticket price should be set if 500 procrastinators attend?
If 750 people attend?
2. If a ticket price of $35 is set, how many procrastinators need to attend for PA to break ...
This solution shows how to make breakeven analysis calculations for the banquet of the non-profit organization Procrastinators Anonymous.