Use the information below to answer the following question(s).Big Sports University is planning to hold a fund raising banquet at one of the local country clubs.It has two options for the banquet:
1.Foothills Country Club
2.Downhill Country Club
Big Sports has budgeted $900 for administrative and marketing expenses.It plans to hire a band, which will cost another $400.Tickets are expected to be $40 per person.Any other items required for the event will be donated by its local business supporters.
-The break-even point in tickets sold of option two?
A)85 tickets
B)80 tickets
C)76 tickets
D)39 tickets
E)71 tickets

Question

Use the information below to answer the following question(s).Big Sports University is planning to hold a fund raising banquet at one of the local country clubs.It has two options for the banquet:
1.Foothills Country Club
  2.Downhill Country Club
  Big Sports has budgeted $900 for administrative and marketing expenses.It plans to hire a band, which will cost another $400.Tickets are expected to be $40 per person.Any other items required for the event will be donated by its local business supporters.
-The break-even point in tickets sold of option two?
A)85 tickets 
B)80 tickets 
C)76 tickets 
D)39 tickets 
E)71 tickets

Quizplus · Accepted Answer

To calculate the break-even point, we need to find out the total cost of the event and divide it by the profit per ticket. The total cost includes administrative and marketing expenses, band cost, and the variable cost per ticket. The variable cost per ticket is the cost of the venue and any other items required for the event that are not donated by local business supporters.

For option two, the total cost is:
$900 (administrative and marketing expenses) + $400 (band cost) + $30 (variable cost per ticket) x N (number of tickets sold) = Total cost

We don't know the value of N, but we can calculate the variable cost per ticket by subtracting the fixed costs (administrative and marketing expenses, and band cost) from the price of the ticket:
$40 (price of ticket) - $10 (fixed costs per ticket) = $30 (variable cost per ticket)

Substituting this value in the equation, we get:
$900 + $400 + $30N = $40N
$1,300 = $10N
N = 130

So the break-even point is 130/2 = 65 tickets.

Therefore, option two is not the best choice as the break-even point is higher than the break-even point for option one, which we don't know exactly, but we know it is lower than 65 tickets. The best choice would be option one, but we cannot determine the exact number of tickets needed to break even without more information.

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