Question

Answer the following questions using the information​ below:

Southwestern College is planning to hold a fund raising banquet at one of the local country clubs. It has two options for the​ banquet:
1. Crestview Country Club

a. Fixed rental cost of​ $1,000
b.​ $12 per person for food
2. Tallgrass Country Club

a. Fixed rental cost of​ $3,000
b.​ $8.00 per person for food

i. Southwestern College has budgeted​ $1,800 for administrative and marketing expenses.
ii. It plans to hire a band which will cost another​ $800.
iii. Tickets are expected to be​ $30 per person.
iv. Local business supporters will donate any other items required for the event.

Answer 1

Crestview BEP 200 persons

Tallgrass BEP 255 persons

Step-by-step explanation:

common fixed cost:

admin and marketing 1800

band to play music 800

2,600

selling price oer person $30

Break even point:

`(Fixed\:Cost)/(Contribution \:Margin) = Break\: Even\: Point_(units)`

Crestview:

`(2,600 + 1,000)/(30-12) = Break\: Even\: Point_(units)`

`200 = Break\: Even\: Point_(units)`

Tallgrass:

`(2,600 + 3,000)/(30-8) = Break\: Even\: Point_(units)`

`254.54 = Break\: Even\: Point_(units)`