Q Events' specialist and analytical approach to events has made them grow in popularity and resulted in a positive impact on the market. This success has developed from their simple online platform linked with specialist event assistants to bridge the viability of events and the clients' requests. A massive Wine & Food event, Vinethon, has landed in Q Events' hands and Wilson Lux has tasked you with conducting an analysis into the pricing scheme of the tickets for the event such that the client and Events both meet their profit targets. The recommended agreed selling price between Q Events and the client is $60 per ticket. As Q Events generates their revenue from ticket sales, they agreed to take 40% of the ticket price and an additional credit card fee of 2% of the ticket price per sale. The client agrees to take the remaining 60% of the ticket price. There are associated fixed costs comprising of salaries, maintenance and operational costs of the website, infrastructure and marketing for the event. In addition, there are variable costs for each attendee per ticket sale of $5 for individual COVID insurance costs. The client is happy to break-even on Vingthen because they want the event to happen and raise awareness and interest in local winemakers. They pay the cost of $12,000 for venue hire and an associated variable cost for each attendee of $15 per ticket for catering. Cost $1,000 $1,500 $2.000 $5,000 $5 per ticket Description Staff Salaries Infrastructure Maintenance + Operational Marketing COVID Insurance Table 2: Associated Costs of Q-Events Description Venue Hire Catering Costs Table 3. Associated Costs of Client Cost $12.000 $15 per ticket (a) (8 marks) Using the above information, calculate: (1) The break-even number of tickets which needs to be sold per event for the client. (ii) The break-even number of tickets which needs to be sold per event for Q Events. (iii) The revenue for Events at break-even. Show all working out including the modelling and solution steps. (b) (4 marks) Suppose the event sells enough tickets such that the client breaks even. What is the Net Profit for Q Events? (c) (7 marks) If Q Events wants to make a profit $4200 when they sell 600 tickets what should be the ticket price for the event? Also, how much does the client make in profit? (d) (2 marks) Suppose Q Events pays another $7 per ticket for premium COVID insurance and they aim to sell 600 tickets to break-even, what should be the ticket price for the event? (e) (4 marks) In Excel, produce a break-even graph for the event in relation to Events and include it here. There will be 3 lines on the one graph: one for Q Event's total cost, one for Q Event's total income when the ticket price is $60 and another for Event's income with your calculated ticket price in part (c). On the graph, identify the general regions corresponding to profits and losses. The units along the x-axis will be the number of tickets while the units along the y-axis gives the revenue in dollars. Excel Instructions: 1. Create a column called Number of Tickets and enter values from 0 to 1000 in increments of 50. This column plays the role of 'x' in break-even calculations, 2. Create three more columns: Total Cost, Total Income I and Total income 2 and adding your initials to these column names. In each of these columns, enter appropriate formulae in EXCEL to obtain the total cost and total revenue corresponding to each value in the Number of Tickets column 3. Highlight the three columns and go to Insert > Charts Scatter to obtain a graph. Label
