Question

In: Accounting

You are planning a New Year’s Eve party,and have identified the following costs: Venue hire 1600...

You are planning a New Year’s Eve party,and have identified the following costs:
Venue hire 1600 pounds,Staff costs 1210 pounds,Food and Drink cost 20 pounds per person.
The venue can hold a maximum of 250 people, and you can sell tickets for 60 pounds each.

How many tickets do you need to sell in order to make profit of 2390 pounds ？

Solutions

Expert Solution

CALCULATION OF CONTRIBUTION MARGIN PER UNIT
PARTICULARS Product  
Selling Price Per Ticket                               60 Pounds
Less: Variable Cost                               20 Pounds
Contribution Margin per unit                               40 Pounds
Target Profit = ( Fixed Cost + target Income ) / Contribution Margin per unit
Target Profit =
Fixed Cost (1600 +1210)                         2,810 Pounds
Add: "+ "
Target Income =                         2,390 Pounds
Equal to =                         5,200
Divide By "/"By
Contribution marrgin per unit                               40
Equal to =                             130 Tickets
Answer = To make profit of 2390 Pounds tickets need to sold = 130 Tickets

ekkarill92 answered 1 year ago
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