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I need Help understanding #2 of this problem, I can see how they got the answer but I don't understand why they use the formula
I need Help understanding #2 of this problem, I can see how they got the answer but I don't understand why they use the formula they use to calculate 20 dollars for the fix portion of the ticket. ? I feel as though I need a deeper explanation. Also why wasn't a break even formula used to go about solving the problem. Is their a longer version that breaks down how they came up with 20 for the fixed portion price of the ticket?
For instance number 1 I understand by doing q * 15 -6000=0 then I solved for q and got 400 as quantity of customers...
Break-Even Analysis and CVP Graphing The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event: Dinner (per person) $18 Favors and program (per person) $2 1 $2,800 Calculation of breakeven sales unit is given below: Band It is given that the price is $35, dinner is $18, favor and program per person is$2, and fixed cost is $6,000 Rental of ballroom $900 (Price- Dinner Breakeven sales unit =+Favor and program Professional entertainment during intermission $1,000 xNumber of person attend - Fixed cost) ($35-$18+$2) Number of person attend -$6,000 Tickets and advertising $1,300 ($i5) Number of person attend = $6,000 The committee members would like to charge $35 per person for the evening's activities. Number of person attend = S6,000 S15 Required: 400 1. Compute the break-even point for the dinner-dance (in terms of the number of persons who Breakeven sales value = Breakeven sales unit x price must attend) 400x$35 $14,000 2.Assume that last year only 300 persons attended the dinner-dance. If the same number attend Hence, the breakeven sales value is S14,000 this year, what price per ticket must be charged in order to break even? Step 2 of 3 2. Calculation of ticket price for breakeven is given below: It is given that the dinner is $18, favor and program is $2, fixed cost is $6,000, and the number of people attend is 300 Fixed cost Number of people attend Ticket price for breakeven -=Dinner +Favor and program $18+$2+6,000 300 =S18+$2+$20 S40 Hence, the ticket price for breakeven is $40Step by Step Solution
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