ASSUME WHAT YOU DON'T HAVE

XYZ Event Management company decides to conduct a full day workshop on Management and Leadership skills. The program includes inviting a well-known Management Guru Mr. PQR to give tips and tricks on management through talks and playing management strategy games. XYZ books an auditorium for the event with a seating capacity of 800 attendees. The full day rent of the auditorium is Rs. 2,00,000/- and XYZ will pay Mr. PQR Rs. 50,000/- as his charges. As part of strategy games, XYZ will provide a kit containing a book written by Mr. PQR and other stationery items required for the activities. XYZ has a tie-up with the vendor who will charge for the kits only to the extent it is used. Food will be served by the auditorium caterer as per the number of actual attendees. Other costs to be incurred by XYZ is Rs. 2,000/- for the memento to Mr. PQR and Rs. 5,000/- for gifts to the winners of various activities. 1. Chart out all variable cost components along with its estimated costs that you think XYZ will have to incur per attendee. (2 m) 2. Decide a suitable selling price of the ticket to the event considering all the costs. (1 m) 3. Based on the data decided by you in part 1 and 2 above, find out the no. of tickets to be sold so that XYZ will be able to recover all its costs (break-even point). Find out the total collections at this point. (5 m) 4. If the company has to make a profit of Rs. 1,00,000/- through this event, how many tickets would be required to be sold? (5 m) 5. 5a. Suppose it rained heavily and the event had to be postponed. The auditorium charged 10% and the caterer charged 5% postponement fees, what would be the new break-even point in terms of no. of tickets to be sold and total collections. (5 m) 5 b. If XYZ were to sell the additional tickets after the event got postponed, how would they price the tickets? Give reason for your answer. (2 m) XYZ Event Management company decides to conduct a full day workshop on Management and Leadership skills. The program includes inviting a well-known Management Guru Mr. PQR to give tips and tricks on management through talks and playing management strategy games. XYZ books an auditorium for the event with a seating capacity of 800 attendees. The full day rent of the auditorium is Rs. 2,00,000/- and XYZ will pay Mr. PQR Rs. 50,000/- as his charges. As part of strategy games, XYZ will provide a kit containing a book written by Mr. PQR and other stationery items required for the activities. XYZ has a tie-up with the vendor who will charge for the kits only to the extent it is used. Food will be served by the auditorium caterer as per the number of actual attendees. Other costs to be incurred by XYZ is Rs. 2,000/- for the memento to Mr. PQR and Rs. 5,000/- for gifts to the winners of various activities. 1. Chart out all variable cost components along with its estimated costs that you think XYZ will have to incur per attendee. (2 m) 2. Decide a suitable selling price of the ticket to the event considering all the costs. (1 m) 3. Based on the data decided by you in part 1 and 2 above, find out the no. of tickets to be sold so that XYZ will be able to recover all its costs (break-even point). Find out the total collections at this point. (5 m) 4. If the company has to make a profit of Rs. 1,00,000/- through this event, how many tickets would be required to be sold? (5 m) 5. 5a. Suppose it rained heavily and the event had to be postponed. The auditorium charged 10% and the caterer charged 5% postponement fees, what would be the new break-even point in terms of no. of tickets to be sold and total collections. (5 m) 5 b. If XYZ were to sell the additional tickets after the event got postponed, how would they price the tickets? Give reason for your answer. (2 m)