Question 3

Champ Ligue is planning to organize a championship celebration themed "UEFA CHAMP" for second time. Following information was gathered in the process of planning the celebration:

-Variable cost of the event was determined as follows: Dinner - RM35 per person, cost of ticket printing RM5 per ticket and Door gift - RM15 per person. The cost is expected to remain same for next few years.

-Fixed cost of the event was determined as follows: Hall Rental - RM30,000 and Music & Band - RM10,000. The cost is expected to remain same for next few years

-Celebration ticket for fans will be sold at RM100 per person.

Required:

a. Calculate the number of tickets that the club need to sell to break even.

b. During the UEFA CHAMP championship celebration in 2020, the club managed to make a profit of RM25,000. Determine the number of ticket that club required to sell to achieve the profit earned in 2020.

c. The club also have a second independent alternative that may boost the sales of tickets.

i. To invite renown singer, Rina, to be the guest of honor. This will cost an additional RM20,000 in entertainment. After careful consideration, the club decides to increase the selling price by 20%. What is the number of tickets to be sold to achieve a target profit of RM25,000?

ii. The club plans to increase the variety of food to its menu which may cost an additional of RM15 per person. This will result in the club to raise the selling price of the ticket by 20%. What is the number of tickets to be sold to achieve a target profit of RM25,000?

iii. Which alternative plan should the social club adopt? You are required to support your option using calculation in (i) & (ii).

d. Explain how break-even analysis would have benefitted Champ Ligue in the process of organising the celebration event. Support your answer with two (2) relevant advantages.