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Question 1 The Penglais Group of Companies has purchased a country mansion for use as a staff training and conference centre. Permanent house staff and
Question 1 The Penglais Group of Companies has purchased a country mansion for use as a staff training and conference centre. Permanent house staff and estate personnel have been engaged at an annual cost of f52,000. Other fixed costs of operating are estimated at f17,600 per annum. Heating, food and laundry costs are likely to be 50 per delegate per week. Normally the centre cannot accommodate more than 30 delegates. Three recommendations are being considered. ONE Open the centre for 40 weeks a year and to make a charge per delegate that will just cover all the costs of the centre. TWO Open the centre for 48 weeks a year and make a charge per delegate of f100 per week. THREE Achieve a profit on operation of f12,000 per annum.REQUIRED: ial (bl it) Calculate: (i) For recommendation ONE, the charge per week per delegate to break-even, assuming full occupancy. (ii) For recommendation TWO, the average number of delegates who must attend each week to break-even. Recalculate the answers given to (a) (parts (i) and (ii)) above to achieve the 12,000 profit as per recommendation THREE. Assuming the centre opened for 48 weeks, state the prot that would result in a particular week when exceptionally, 37 delegates attended and were charged 120 each per week
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