Question

Need help please

1) You are serving as the chair for your community's annual wellness campaign. A key event is the annual Walk 3k, Run 10k, Ride 20k event. The event is staged entirely by volunteers and the goal is to attract community-wide awareness of getting active as a key step to wellness. In other words, the goal is not to raise money, but to prompt awareness. As the chair, you set a financial goal to break even on the one and only cost of the event, a fitness bag with the community seal and the event moto, "I AM ON THE RIGHT TRACK!" The cost of the bags, which must be ordered in batches of 100, are: O O Bags Fixed Cost Variable Cost Total Cost Marginal Cost 1700 100 1700 500 200 1700 1200 300 1700 2700 Saved to this PC 1700 5200 500 1700 9000 600 1700 15000 700 1700 23800 800 1700 36800 900 1700 55800 1000 1700 83000 a) Complete the table. b) You will charge an entry fee of $15 per participant. Determine the breakeven quantity of bags you must order. Remember orders must be in blocks of 100.

Answer 1

Answer:

a)

Bags	Fixed Costs	Variable Costs	Total Cost	Marginal Cost
0	1700	0	1700	NA
100	1700	500	2200	5
200	1700	1200	2900	7
300	1700	2700	4400	15
400	1700	5200	6900	25
500	1700	9000	10700	38
600	1700	15000	16700	60
700	1700	23800	25500	88
800	1700	36800	38500	130
900	1700	55800	57500	190
1000	1700	83000	84700	272

Marginal Cost=Change in total cost/change in units

b)

Breakeven point is the point where Total cost=total revenue

Bags	Fixed Costs	Variable Costs	Total Cost	Marginal Cost	Total Revenue=Bags*15
0	1700	0	1700	NA	0
100	1700	500	2200	5	1500
200	1700	1200	2900	7	3000
300	1700	2700	4400	15	4500
400	1700	5200	6900	25	6000
500	1700	9000	10700	38	7500
600	1700	15000	16700	60	9000
700	1700	23800	25500	88	10500
800	1700	36800	38500	130	12000
900	1700	55800	57500	190	13500
1000	1700	83000	84700	272	15000

As we can see from above we can see 2 points which can be breakeven(near breakeven as bags must be in multiples of 100). BEP can be on 200 or 400 bags.

400 bags seems more reasonable.

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