Question

Please show work or explain to help me understand a little better. Thank you!

The Public Budgeting and Finance Association is planning its annual conference. The conference hotel has quoted the following prices for services: Thursday afternoon Conference facilities rental: $425 Coffee-break service: $10 per person Audiovisual equipment rental: $55 Evening reception: $25 per person Friday Conference facilities rental: $750 Coffee-break service, morning and afternoon: $15 per person Continental breakfast: $15 per person Luncheon: $20 per person Audiovisual equipment rental: $150 Saturday morning Conference facilities rental: $375 Continental breakfast: $15 per person Coffee-break service: $10 per person Audiovisual rental: $75 Program materials and marketing would cost about $550. The association charged $130 for each participant last year and would like to use the same price this year. a. Prepare a break-even chart for the conference and determine the break-even attendance level. b. Suppose the association wanted to encourage student participation by charg- ing a rate that would cover only the costs directly caused by their attendance. What price would you charge? c. Prepare a budget for the event if you expect 110 people to attend. (for "a", you do not need to prepare a break- even chart, just calculate the break-even attendance level: for "c", just calculate the surplus or deficit with 110 people attending

Answer 1

Please find below table useful to compute desired results: -

F a. А 1 Variable costs 2 Day 3 Thursday Cost per person Break even point in number of persons (=C23/C12 Break even point in Fees Collection =C23/C13*100 5 Friday b. Price covering only Variable cost =C10 Particulars Coffee-break services Evening reception Coffee-break services Continental Breakfast Luncheon Continental Breakfast Coffee-break services Total Variable cost Fees Contribution per person Contribution margin 8 Saturday =SUM(C3.C9) 130 =C11-C10 =C12/C11 100 Particulars Sales Less: Variable Cost Contribution Less: Fixed cost Surplus/Deficit Amount =C11*110 =C10*110 =F10-F11 =C23 =F12-F13 13 14 Fixed Costs 15 Day 16 Thursday There would be deficit 17 18 Friday 750 Particulars Cost Conference facilities rental 425 Audiovisual equipment rental 55 Conference facilities rental Audiovisual equipment rental Conference facilities rental 375 Audiovisual equipment rental 75 Program Material and Marketing 550 Total fixed cost =SUM(C16:C22) 150 20 Saturday

End results would be as follows: -

А в 1 Variable costs 2 Day 3 Thursday 4 5 Friday Break even point in number of persons Break even point in Fees Collection 119.00 15,470.00 Price covering only Variable cost 110.00 Particulars Coffee-break services Evening reception Coffee-break services Continental Breakfast Luncheon Continental Breakfast Coffee-break services Total Variable cost Fees Contribution per person Contribution margin Cost per person 10.00 25.00 15.00 15.00 20.00 15.00 10.00 110.00 130.00 20.00 15.38 8 Saturday Particulars Sales Less: Variable Cost Contribution Less: Fixed cost Surplus/Deficit Amount 14,300.00 12,100.00 2.200.00 2.380.00 (180.00) Cost There would be deficit 13 14 Fixed Costs 15 Day 16 Thursday 17 18 Friday 19 20 Saturday Particulars Conference facilities rental Audiovisual equipment rental Conference facilities rental Audiovisual equipment rental Conference facilities rental Audiovisual equipment rental Program Material and Marketing Total fixed cost 425.00 55.00 750.00 150.00 375.00 75.00 550.00 2,380.00 21 22