Food and merchandise revenue

Assignment Help Managerial Accounting
Reference no: EM13915828

The Pritzker Music Pavilion in downtown Chicago is a technologically sophisticated and uniquely designed performing arts venue that hosts live concerts attended by over half a million patrons a year. A group of local organizers, led by a prominent local businesswoman, would like to use the pavilion for a concert to benefit Ceres, a non-profit, national network of investors and environmental organizations working with companies and investors to address sustainability challenges such as global climate change. If the pavilion management agrees to host the concert, the organizers will donate all profits to Ceres (or absorb any losses).

Based on the following revenue and cost information, the organizers would like answers to several questions.

There are three sources of revenue for the concert:

Tickets will be sold for $15.00 each.

A large multinational corporation headquartered in Chicago will donate $2.00 per ticket sold.

Each concert attendee is expected to spend an average of $18.00 for parking, food, and merchandise.

On the expense side, there are also three components:

A popular national group has agreed to perform at the concert. Normally, the group demands a significant fixed fee to perform, but to reduce the risk for the organizers, the group has agreed to perform for $7.00 per ticket sold.

The organizers will pay several companies to operate the parking, food, and merchandise concessions. They will pay $24,000 plus 15% of all parking, food, and merchandise revenue.

The organizers will pay the pavilion $95,000 plus $7.00 per person attending to cover its operating expenses (production, maintenance, advertising, etc.).

REQUIRED [ROUND YOUR CM ANSWER TO THE NEAREST CENT; ROUND ALL OTHER ANSWERS TO THE NEAREST UNIT OR NEAREST DOLLAR.]

1. What is the estimated contribution margin per ticket sold for the benefit concert?   

2. What are the estimated total fixed costs for the benefit concert?   

3. What is the estimated profit from the benefit concert if 12,000 tickets are sold?   

4. How many tickets must be sold in order for concert profit to be $80,000?   

5. Assuming a tax rate of 33% on profits from the concert, what must dollar ticket sales be in order for after-tax concert profits to be $80,000?   

6. Assume that the organizers can negotiate the fixed payment for the pavilion's operating expenses. If the organizers expect to sell 12,000 tickets, how much can they afford to pay and still earn a profit of $80,000 (ignore taxes)?

Reference no: EM13915828

Questions Cloud

Using proquest search for the keywords business plan : Using ProQuest, Factiva, EBSCO, or some other business database, search for the keywords business plan, and if you want more sources, for business model.
What is the area : You have a rectangle that is 4 2/3 ft in long and 1 1/2 ft in width. Add 1/4 to each side. What is the area
Private message to instructor tab : What steps would you take to post a private message to your instructor in New Classroom?
Exchange for having his tuition paid : 1. Sam promises his uncle, Bob, that he will lose 10 pounds and exercise every day during the spring semester in exchange for having his tuition paid for the fall semester. The uncle agrees; but after Sam has lost 10 pounds and exercised all semes..
Food and merchandise revenue : The organizers will pay several companies to operate the parking, food, and merchandise concessions. They will pay $24,000 plus 15% of all parking, food, and merchandise revenue.
Prepare the journal entries required for these transactions : a. What amount of dividends will be paid to the preferred shareholders versus the common shareholders?
What was the purpose of study : Q1) What was the purpose of study How does this study apply to the real world? Q2) If you were doing the next step in this study, which research question would you develop? How could you test it?
Relationship between language and thinking : Consider the following quote by the philosopher Ludwig Wittgenstein, who believed that thought without language was impossible: "The limits of my language are the limits of my life."
Design an economic policy solution : Design an economic policy solution to the problem. Analyze the economic theory used to complete the policy solution and determine the impact on the appropriate stakeholders.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd