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q1: q2: help and explain The Museum of History is preparing for its annual appreciation dinner for contributing members. Last year, 650 members attended the
q1:
q2:
help and explain
The Museum of History is preparing for its annual appreciation dinner for contributing members. Last year, 650 members attended the dinner. Tickets for the dinner were $26 per attendee. The profit report for last year's dinner follows.[ (Click the icon to view the profit report.) This year the dinner committee does not want to lose money on the dinner. To help achieve its goal, the committee analyzed last year's costs. Of the §17.950 cost of the dinner, 55 500 were fixed costs and $8 450 were variable costs. Of the 53,500 cost of invitationsand papenwork, 52,850 were fixed and $650 were variable. Read the requirements. Requirement 1. Prepare last year's profit report using the contribution margin format. (Use parentheses or a minus sign when entering losses ) Requirement 2. The committee is considering expanding this year's dinner invitation list to include volunteer members (in addition to contributing members). If the committes expands the dinner invitation list, it expects attendance to double. Calculate the effect this will have onthe profitability of the dinner assuming fixed costs will be the same as last year. (Use parentheses or a minus sign when entering losses.) If the museum expands the dinner invitation list, the profit (loss) will be Data table Ticket sales 16,900 Cost of dinner o 11es0 Gross margin (1,050} Invitations and paperwork —35"Profit (loss) (4.550) Blueline Printing Company currently leases its only copy machine for $1,500 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement,line would pay a commission for its printing at a rate of $20 for every 500 pages printed. Thcompany currently charges $0.20 perthe company$0.09 per page and other variable costs, including hourly labor, amount to $0.10 per page.Read the requirements.Requirement 1. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement?First, determine the formula used to calculate the breakeven point in units, then calculate the company's breakeven point under the current leasing agreement (Enter a "0" for any zero balances.)= Breakeven number of unitsWhat is it under the new commission-based agreement? (Enter a "0" for any zero balances.)The company's breakeven point under the new commission-based agreement isunits.Requirement 2. For what range of sales levels will Blueline prefer (a) the fixed lease agreement and (b) the commission agreement?In order to determine the range of sales levels Blueline would prefer for each agreement, we must first calculate the indifference point.The indifference point =Now calculate the indifference point. (Round to the nearest whole number.)The indifference point is atunits.Blueline would prefer the fixed lease agreement atThe commission based agreement would be preferred atRequirement 3. Blueline estimates that the company is equally likely to sell 20,000, 30,000, 40,000, 50,000, or 60.000 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement What is the expected value of each agreement? Which agreement should Blueline choose?Begin with the fixed leasing agreement. (Use parentheses or a minus sign for losses.)Fixed leasing agreementExpectedSales level Profit/(Loss)Profit/(Loss)20,0030,0040,0050,0060,00Total expected profit/(loss)Next, calculate the expected profit at each sales level under the commission based agreement.Commission-based agreementExpectedSales level Profit/(Loss)Profit/(Loss)20,00030,0040,00050.0060,000Total expected profit/(loss)Blueline should chooseagreementStep by Step Solution
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