The following revenue and expense figures relate to the first year of the rodeo.
Receipts
Contributions from sponsors $22,000
Receipts from ticket sales $28,971
Share of concession profits $1,513
Sale of programs $600
Total receipts $53,084
Expenses
Livestock contractor $26,000
Prize money $21,000
Contestant hospitality $3,341*
Sponsor signs for arena $1,900
Insurance $1,800
Ticket printing $1,050
Sanctioning fees $925
Entertainment $859
Judging fees $750
Port-a-potties $716
Rent $600
Hay for horses $538
Programs $500
Western hats to first 500 children $450
Hotel rooms for stock contractor $325
Utilities $300
Sand for arena $251
Miscellaneous fixed costs $105
Total expenses $61,410
Net loss $ (8,326)
*The club contracted with a local caterer to provide a tent and food for the contestants. The cost of the food was contingent on the number of contestants each evening. Information concerning the number of contestants and the costs incurred are as follows:
Contestants Total Cost
Friday 68 $998
Saturday 96 $1,243
Sunday 83 $1,100
$3,341
Break-even point in Dollars is fixed cost / contribution margin ratio
Since the variable is at 4% total revenue, the contribution margin ratio is 96% or .96
$51,000/ .96 = $53,125
Contributions from sponsors = $25,600
Amount from ticket sales for break-even = $27,525
Compute the break-even point in dollars of ticket sales assuming Adrian and Jonathan's assumptions are correct as given in the case. This requirement is to calculate break even in dollars. The amount you calculate will be from all sources of revenue including contributions from sponsors. The requirement is for ticket sales only. Contributions from sponsors is stated in the case as $25,600. As an example, let's say that using the break even formula you calculate break even in dollars as $60,000. This is not the answer for the requirement. You need the amount of ticket sales which would be the $60,000 less $25,600 or $34,400 in ticket sales. It is critical that you account for the contributions from the sponsors. The rest of the case deals with ticket sales revenue. If you don't calculate ticket sales correctly, all of the other case answers you get will be wrong.
Note: The case states that variable costs are 4% of total revenue. What must the contribution margin ratio be if variable costs are 4% of total revenue?
Section 2
Shelley has just learned you are calculating the break-even point in dollars of ticket sales. She is still convinced the Club can make a profit using the assumptions above (second bullet point above).
Calculate the dollars of ticket sales needed to earn a target profit of $6,000.
Calculate the dollars of ticket sales needed to earn a target profit of $12,000.
Are the facilities at the fairgrounds adequate to handle crowds needed to generate ticket revenues calculated above (third bullet point above) to earn a $6,000 profit? Show calculations to support your answers.
In: Accounting
You are considering the purchase of an investment that would pay you $66 per year for Years 1-4, $45 per year for Years 5-7, and $98 per year for Years 8-10. If you require a 14 percent rate of return, and the cash flows occur at the end of each year, then how much should you be willing to pay for this investment? Show your answer to the nearest $.01. Do not use the $ sign in your answer.
In: Finance
Mary has to prepare a budget for the upcoming year. To know how much to set aside for medical expenses, she decides to take a look at how much she spent last year on keeping herself healthy. She pays $100 a month for her health insurance. Here are the details of her health insurance plan: the policy pays 80% of all hispital and pharamcy bills, with no out-of-pocket maximum of $400 befoer the insurer pays 100% The plan also requires a $20 co-pay each time she visits a doctor or picks up a prescribed medicine. The plan does not cocver dental or vision health needs. She has kept receipts for the last calendar year:
February
- Two doctors visits, costing $250
- One co-pay for prescription medicine, a $60 cosst
April
- Emergency visit to the dentist to remove tooth: $600
August
- Doctors visits, costing $250
- Visit to the Radiolosgist for x-rays, costing $850
- Follow-up visit to the radiologist: $300
November
- One doctors visit for a yearly physical, costing $400
Last year:
a- How much did Mary pay in co-pay overf the course of the year?
b- What percent of the dentist's bill did Mary have to pay herselft?
c- What was the total cost of doctor's bills and medicine?
d- In what month did Mary meet the out-of-pocket maximum of $400?
e- Of the $400 cost of the annual physical exam, how much did Mary have to pay?
In: Accounting
Calculate the NPV for a 3-year project with the following cash
flows and a required return of 15%:
CF0 = -$800,000 ATCF1 = $160,000 ATCF2 = $160,000 ATCF3 = $160,000
ATER = $600,000
Calculate the IRR for a 2-year project with the following cash
flows and a required return of 12%:
CFO = -$375,000 ATCF1 = $27,500 ATCF2 = -$134,800 ATER =
$596,000
ATER = After-Tax Equity Reversion
ATCF = After-Tac Cash Flow
Please show me how you answer the problem.
In: Accounting
The net income reported on the income statement for the current year was $410,400. Depreciation recorded on store equipment for the year amounted to $17,470. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
| End of Year | Beginning of Year | |
|---|---|---|
| Cash | $39,800 | $37,960 |
| Accounts receivable (net) | 31,820 | 27,630 |
| Merchandise inventory | 39,230 | 43,060 |
| Prepaid expenses | 3,750 | 4,820 |
| Accounts payable (merchandise creditors) | 39,770 | 35,040 |
| Wages payable | 20,280 | 24,950 |
Required:
| A. | Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. |
| B. | Briefly explain why net cash flow from operating activities is different than net income. |
In: Accounting
Margaret started her own business in the current year and will report a profit for her first year. Her results of operations are as follows:
|
|||||||||||||||||||||||||||
Complete the table below to determine the net income Margaret should show on her Schedule C.
If an amount is zero, enter "0". If required, round the amounts to the nearest dollar.
|
In: Accounting
Assume you barrow $100,000 for a year and the stated interest rate is 5 percent. The loan will be st up as an installment loan with monthly payment. 1) What is the annual percentage rate? 2) Discuss why the annual percentage rate is different then the stated interest rate.
In: Accounting
An investor buys a property for $608,000 with a 25-year mortgage that requires monthly payments at 5.10% APR. After 18 months the investor resells the property for $667,525. How much cash will the investor have from the sale, once the mortgage is paid off? Round to the nearest dollar.
In: Finance
HOW TO ENTER PRIOR ACCUMULATED DEPRECIATION 179 BONUS ON CURRENT TAX YEAR
In: Accounting
College tuition:
The mean annual tuition and fees in the 2013 - 2014 academic year for a sample of 15 private colleges in California was 32,500 with a standard deviation of $7250. A dotplot shows that it is reasonable to assume that the population that the population is approximately normal. Can you conclude that the mean tuition and fees for private institutions in California is less than 35,000? Use a = 0.05 level of significance and the critical value method.
The hypothesis is a ... test.
In: Math