Question

Please show/explain work and answer all parts

Plainview Arts Center is planning a fundraising dinner. The event will be held in a city park. The city will charge $1,000 for use of the space, and private security will be hired for $400. $1,500 will be spent on advertising. A local band will be hired. The band will be paid $600 plus 12% of ticket sales. Dinner will be catered buffet style, and will cost $25/person (gratuities optional for guests). Ticket price will be $90. Required: a) How many tickets must be sold to break even? b) What will be the profit if 120 tickets are sold? c) An alternative plan has been proposed, to hold a banquet style dinner at a good hotel. Ticket price would be $150. The hotel would provide the banquet at a costs of $60/guest, plus mandatory 20% gratuity. There would be no rent or security costs, and advertsing cost would remain the same. There would be no band; instead, a local television celebrity would be hired for $2,200 to serve as master of ceremonies. If this plan were adopted, how many tickets would have to be sold to earn the same profit as computed in (b) above?

Answer 1

Answer:

Plainview Arts Center			Plainview Arts Center			Plainview Arts Center
Cost:			Cost:			Cost:
Use of space	$ 1,000.00		Use of space	$       1,000.00		Advertising	$   1,500.00
Security	$      400.00		Security	$          400.00		Celebrity charges	$   2,200.00
Advertising	$ 1,500.00		Advertising	$       1,500.00		Banquet Cost (60 per guest)	$   5,160.00
Band charges	$      600.00		Band charges	$          600.00		20% gratuity	$   1,032.00
& 12% on sale for Band charges	$      702.00		& 12% on sale for Band charges	$       1,296.00		Total Cost	$   9,892.00
Dinner (25 per person)	$ 1,625.00		Dinner (25 per person)	$       3,000.00
Total Cost	$ 5,827.00		Total Cost	$       7,796.00		Ticket Price	$       150.00
						Total ticket sold	$         86.00
Ticket Price	$        90.00		Ticket Price	$             90.00		Total ticket Sale	$ 12,900.00
Total ticket sold	$        65.00		Total ticket sold	$          120.00		Profit	$   3,008.00
Total ticket Sale	$ 5,850.00		Total ticket Sale	$    10,800.00		b) 86 tickets have to sold for getting same profit as in (b)
a) 65 tickets have to sold for break even			Profit	$       3,004.00
			b) if 120 tickets have sold, then profit is $ 3004