3-52 Gross margin and contribution margin. The Museum of Fine Art is preparing for its annual appre- ciation dinner for contributing members. Last year, 500 members attended the dinner. Tickets for the dinner were $30 per attendee. The profit report for last year's dinner follows. Ticket sales Cost of dinner Gross margin Invitations and paperwork Profit (loss) $15,000 16,000 (1,000) 2,500 $ (3,500) This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the com- mittee analyzed last year's costs. Of the $16,000 cost of the dinner, $8,500 were fixed costs and $7,500 were variable costs. Of the $2,500 cost of invitations and paperwork, $1,750 were fixed and $750 were variable. 1. Prepare last year's profit report using the contribution margin format. 2. The committee is considering expanding this year's dinner invitation list to include volunteer members (in addition to contributing members). If the committee expands the dinner invitation list, it expects at- tendance to double. Calculate the effect this will have on the profitability of the dinner assuming fixed costs will be the same as last year.