Marc Lafond, the secretary of Club Horizon, is investigating the feasibility of conducting weekly bingo nights. The club does not have a hall of its own. So$,$ Lafond has approached a local hotel to rent its hall. The manager of the hotel is willing to commit its hall for a lump sum rental of per night. The rent would include cleaning and setting up and taking down the tables and chairs.

Read the requirements.

Requirement $1.$ A local printer has shown interest in providing bingo cards in return for free advertising on the cards. Local merchants would donate door prizes. The services of clerks, callers, security force, and others would be donated by the club members. Admission would be per person. This amount entitles a player to one card, and extra cards will be available at each. It is expected that many people will buy extra cards, so there would be an average of six cards played per person. What is the maximum in total cash prizes the club can award and still break even if $200$ people attend each weekly session?$\backslash$end$\{$array$\}]$

Requirement $2.$ Suppose the total cash prizes are $.$ What will the club's operating income be if $50$ people attend? If $200$ people attend? If $350$ people attend? Briefly explain the effects of cost behavior on income.

Begin by selecting labels and entering the amounts to calculate the budgeted operating income $($loss$)$ at each level of attendance. $($Be sure to enter a $"0"$ for any balances of $0.$ Use a minus sign or parentheses for a loss. Round the total sales to the nearest whole Euro.$)$

$\backslash$table$[[$Level of attendance,$50$ people,$200$ people,$350$ people$],[,,,],[,,,],[,,,]]$

Requirements

A local printer has shown interest in providing bingo cards in return for free advertising on the cards. Local merchants would donate door prizes. The services of clerks, callers, security force, and others would be donated by the club members. Admission would be per person, entitling the player to one card; extra cards would be available at each. It is expected that many people will buy extra cards, so there would be an average of six cards played per person. What is the maximum in total cash prizes that the club may award and still break even if $200$ persons attend each weekly session?

Suppose the total cash prizes are $.$ What will the club's operating income be if $50$ people attend? If $200$ people attend? If $350$ people attend? Briefly explain the effects of cost behavior on income.

After operating for $6$ months, Reverend Lafond is thinking of negotiating a different rental arrangement but keeping the prize money unchanged at $.$ Suppose the rental arrangement is per night plus per person. Compute the operating income for attendance of $50,200,$ and $350$ persons, respectively. Explain why the results differ from those in Requirement $2.$

Operating income $($loss$)$

$]q,1q,q,q,$

Briefly explain the effects of the cost behavior on income.

Being highly leveraged means having

In this case, the company is $$

Therefore, the revenue is the contribution margin, and as volume departs from the break$-$even point, $q,$

Requirement $3.$ After operating for $6$ months, Lafond is thinking of negotiating a different rental arrangement but keeping the prize money unchanged at $.$ Suppose the rental arrangement is per night plus per person. Compute the operating income for attendance of $50,200,$ and $350$ people respectively. Explain why these results differ from those in Requirement $2.$

Begin by selecting labels and entering the amounts to calculate the budgeted operating income $($loss$)$ at each level of attendance. $($Be sure to enter a $"0"$ for any balances of $0.$ Use a minus sign or parentheses for a loss. Round the total sales to the nearest whole Euro.$)$Explain why the results of Requirement $3$ differ from those of Requirement $2.$

Note how the risk in Requirement $3$ is because of $,$ fixed costs are As a result, when attendance is low, the club will $q,$ and when attendance is high, the club will $q,$ they did in the scenario for Requirement $2.$