Question

If a stadium pays $20,000 for labor and $13,000 for parking, what is the stadium's profit margin if the game generates $206,000 in revenue?

Answer 1

The stadium's profit margin is calculated by subtracting the total expenses from the total revenue and dividing the result by the total revenue. In this case, the profit margin is 83.98%.

Step-by-step explanation:

To calculate the profit margin for the stadium after a game, we subtract the total expenses from the total revenue and then divide by the total revenue. The stadium's total expenses are the sum of labor costs and parking costs, which are $20,000 and $13,000, respectively. The total revenue generated from the game is $206,000.

Profit Margin Calculation:

• Total expenses = Labor ($20,000) + Parking ($13,000) = $33,000
• Total profit = Total revenue - Total expenses = $206,000 - $33,000 = $173,000
• Profit margin = (Total profit / Total revenue) x 100 = ($173,000 / $206,000) x 100

The profit margin percentage is calculated by multiplying the result by 100 to convert it into a percentage. Therefore:

Profit margin = (Total profit / Total revenue) x 100
= ($173,000 / $206,000) x 100
= 0.8398 x 100
= 83.98%