Question

Livingston Music Society is a​ not-for-profit organization that brings guest artists to the​ community's greater metropolitan area. The music society just bought a small concert hall in the center of town to house its performances. The lease payments on the concert hall are expected to be $4,000 per month. The organization pays its guest performers $1,800 per concert and anticipates corresponding ticket sales to be $4,500 per concert. The music society also incurs costs of approximately $1,000 per concert for marketing and advertising. The organization pays its artistic director $33,000 per year and expects to receive $30,000 in donations in addition to its ticket sales.

1. If the Livingston Music Society just breaks​ even, how many concerts does it​ hold?

2. In addition to the​ organization's artistic​ director, the music society would like to hire a marketing director for $25,500 per year. What is the breakeven​ point? The music society anticipates that the addition of a marketing director would allow the organization to increase the number of concerts to 44 per year. What is the music​ society's operating​ income/(loss) if it hires the new marketing​director?

3. The music society expects to receive a grant that would provide the organization with an additional $17,000 toward the payment of the marketing​ director's salary. What is the breakeven point if the music society hires the marketing director and receives the​ grant?

Answer 1