Homework review and correcting
Breakeven Analysis
| 1: Breakeven Analysis | |||||||||
| The Bentley Student Association (BSA) is planning a fund raising event to support its student activities. The BSA is planning to hire the Dizzy Gillespie Heritage Band as entertainment. The Kennedy Museum was selected as the site for the event. The Museum will charge the BSA $600 for the use of its banquet room. Sylvia’s Restaurant was selected to cater the event. Sylvia’s Restaurant will charge the BSA a flat fee of $400 and a $20 per meal charge for each participant. The BSA plans to charge $50 per student or alumnus to attend the event and expects about 100 students or alumni will attend the event.
In the spreadsheet below: Hint: be careful of flat fees vs. per person charges. |
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| Revenue: | # | $ | |||||||
| ticket sales | 100 | $ 50 | $ 5,000 | ||||||
| Expenses: | |||||||||
| Venue | 1 | $ 600 | $ 600 | ||||||
| caterer | 100 | $ 20 | $ 2,400 | ||||||
| $ 3,000 | |||||||||
| entertainment | $ 2,000 | ||||||||
| Questions: | |||||||||
| 1. Should the BSA pay the breakeven cost for entertainment? Why or why not? No 2. How can the BSA increase revenue for the fundraiser? 3. The BSA is considering raising the admission price to increase revenues for the fundraiser. What are the pros and cons of this action? |
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| Answers | |||||||||
| 1 | No. If BSA pays the cost they will not make any profit or revenue | 3 | Pros | Increase of gains/ more profit | |||||
| 2 | Increase the number of tickets or decrease the cost for the catering and entertainment services | Cons | It may cause a decrease in the number of students participating in the event | ||||||
Cost Allocation
| 2: Cost Allocation |
| Using the cost information for the Waterville Fire Department provided below, complete a cost allocation table to allocate direct costs of Fire Inspection Service and General Administration Centers to the two mission |
