Fixed versus variable cost behavior Joyner Entertainment sponsors rock concerts. The company is considering a contract to
Question:
Fixed versus variable cost behavior Joyner Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $50,000 per concert.
Required
a. What are the total band cost and the cost per person if concert attendance is 2,000, 2,500, 3,000, 3,500, or 4,000?
b. Is the cost of hiring the band a fixed or a variable cost?
c. Draw a graph and plot total cost and cost per unit if attendance is 2,000, 2,500, 3,000, 3,500, or 4,000.
d. Identify Joyner’s major business risks and explain how they can be minimized.
Step by Step Answer:
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 9780073526799
4th Edition
Authors: Thomas Edmonds, Bor-Yi Tsay, Philip Olds
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