Question

Exercise 2-7A Fixed versus variable cost behavior LO 2-1 Solomon Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $90,000 per concert. Required a. What are the total band cost and the cost per person if concert attendance is 1,000, 1,500, 2,000, 2,500, or 3,000? b. Is the cost of hiring the band a fixed or a variable cost? Complete this question by entering your answers in the tabs below. Required A Required B What are the total band cost and the cost per person if concert attendance is 1,000, 1,500, 2,000, 2,500, or 3,000? (Round "Cost per person" answers to 2 decimal places.). 1,000 1,500 2,000 2,500 3,000 Number attending Total cost of concert Cost per personſ Required A Required B >

Answer 1

calculate following

Number attending	1000	1500	2000	2500	3000
Total cost of concert	90000	90000	90000	90000	90000
Cost per person (Total cost/No of attendee)	90	60	45	36	30

b) Since the cost of hiring a band remains at 90000 regardless of no of attending so it is fixed cost