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Question Xtabel' is a private company that specialises in the organisation and delivery of large conferences and training courses for public and private sector organisations.
Question Xtabel' is a private company that specialises in the organisation and delivery of large conferences and training courses for public and private sector organisations. The company has recently been approached by a public sector organisation to organize and deliver a three day conference in Takoradi. The accountant for the company has prepared the following cost estimates. The venue for the conference will cost GHS3,000 per day. It will be required for a three day period. There are to be 12 guest speakers. They will be paid a sum of GHS300 each. The food for the delegates is expected to cost a total of GHS70 per delegate over the three day period. Conference programmes, name badges and additional printing will cost GHS10 per delegate. There will be 25 staff required to provide catering and waiter services. They will each be paid GHS40 for each of the 3 days. The price of the conference is to be inclusive of accommodation, and this is expected to cost Xtabel' GHS120 per delegate for the three day period. Directly attributable overheads are GHS4,400. The price charged per delegate is GHS250. The maximum capacity of the conference centre is 500 delegates. Required a) (i) Calculate the number of delegates required for 'Xtabel' to break even. (ii) Represent this information on a fully labelled break-even chart. b) State the percentage margin of safety and the profit earned at this level if the maximum number of delegates attend the conference. c) Calculate the price per delegate that would be required to produce a profit of GHS12,000, assuming the maximum number of delegates attend the conference. d) State eight assumptions that are inherent in the techniques that you have used. 120 marks]
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