Focus on Decision Suppose that the cost of goods sold is the only variable cost; selling, administrative, eral, and interest expenses are fixed with respect to sales. Assume that ConAgra had another 12% increase in sales in 1995 and that there was change in costs except for increases associated with the higher volume of sales. Compute th predicted 1995 operating profit for ConAgra and the percentage increase in operating pro Explain why the percentage increase in profit differs from the percentage increase in sale 2-36 Bingo and Leverage A California law permits bingo games when offered by specified nonprofit institutions including churches. Reverend Jill Bono, the pastor of a new parish in Marin County, no hal investigating the desirability of conducting weekly bingo nights. The parish has but a local hotel would be willing to commit its hall for a lump-sum rental of $600 night. The rent would include cleaning, setting up and taking down the tables chairs, and so on. I per and 1. Bingo cards would be provided by a local printer in return for free advertising there on. Door prizes would be donated by local merchants. The services of clerks, callen security force, and others would be donated by volunteers. Admission would be $3 pe person, entitling the player to one card; extra cards would be $1.50 each. Reverend Bono also learns that many persons buy extra cards, so there would be an average ecards plaved per person. What is the maximum in total cash prizes that the 200 persons attend each weekly session? red chairs, and so on. 1. Bingo cards would be provided by a local printer in return for free advertising there security force, and others would be donated by volunteers. Admission would be $3 per on. Door prizes would be donated by local merchants. The services of clerks, callen, person, entitling the player to one card; extra cards would be $1.50 each. Reverend Bono also learns that many persons buy extra cards, so there would be an average d four cards played per person. What is the maximum in total cash prizes that the church may award and still break even if 200 persons attend each weekly session? 2. Suppose the total cash prizes are $900. What will be the church's operating income if 100 persons attend? If 200 persons attend? If 300 persons attend? Briefly explain the effects of the cost behavior on income. differert 3. After operating for 10 months, Reverend Bono is thinking of negotiating a rental arrangement but keeping the prize money unchanged at $900. Suppose the rent is $200 weekly plus $2 per person. Compute the operating income for alter- dance of 100, 200, and 300 persons, respectively. Explain why the results differ from those in requirement 2.