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
a. Fixed rental cost of $600
b. plus $15.00 per person for food.
2. Downhill Country Club
a. Fixed rental cost of $1,080
b. It will have to hire a caterer who charges $12.00 per person for food.
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.
-What is the "operating income" assuming 250 people attend and option two is chosen?

Question

Quizplus · Accepted Answer

Operating income is calculated as total revenue minus total expenses. With 250 attendees, revenue is 250 * $40 = $10,000. Expenses include the fixed rental cost ($1,080), catering ($12 * 250 = $3,000), administrative and marketing expenses ($900), and band cost ($400). Total expenses are $1,080 + $3,000 + $900 + $400 = $5,380. Therefore, operating income is $10,000 - $5,380 = $4,620.

Use the Information Below to Answer the Following Question(s)