Question

Hyundai Automobile U.S.A. is sponsoring a charity golf tournament to raise monies for a​ children's hospital in Birmingham. Hyundai budgets​ $5,400 in costs for administration and marketing for the event. The band will cost a fixed amount of​ $2,100. Tickets to this local community event will be​ $350 per person. All proceeds from the event will be donated to the​ children's hospital. There are two possible​ venues:

RTJ Golf Resort at​ Prattville, which has a fixed rental cost of​ $10,220. The hotel provides for meals and waiters and waitresses to serve drinks and finger foods at​ $65 per person. The green fees and cart for each person will be​ $40.

Wynlakes Golf​ & Country​ Club, which has a fixed rental cost of​ $2,300 plus a charge of​ $110 per person for its own catering of meals and serving of drinks and finger foods. The green fees and cart for each person will be​ $50.

​(a) Compute the​ break-even point for each venue in terms of tickets sold.

The​ break-even point for tickets sold from RTJ Golf Resort at Prattville​ is:

A.

68

B.

70

C.

85

D.

73

The​ break-even point for tickets sold from Wynlakes Golf​ & Country Club​ is:

A.

52

B.

45

C.

61

D.

50

​(b) At what level of tickets sold will the two venues have the same operating​ income?

The two venues will have the same operating income with ticket sales​ at:

A.

146

B.

134

C.

123

D.

144

Answer 1

a) D. 73 ( See calculation below)

b) A. 52 ( See calculation below)

c) D. 144