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Chapter 5 Exercise 2
The treasurer anticipates the following costs for the event, which will
be held at the Regency Hotel:
Room rental
$300
Dinner cost (per person)
25
Chartered buses
500
Favors and souvenirs (per person)
Band
5
900
Each person would pay $40 to attend; 200 attendees are expected.
a. Will the event be profitable for the sorority? Show computations.
b. How many people must attend for the sorority to break even?
c. Suppose the sorority encouraged its members to drive to the hotel
and did not charter the buses. Further, a planned menu change will
reduce the cost per meal by $2. If each member will still be charged
$40, compute the contribution margin per person.
Chapter 5 Exercise 3
3. Break-even and other CVP relationships