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Questions 5 and 6 are based on the following information. A club is planning an event. The following costs are expected: Dinner per person Gift
Questions 5 and 6 are based on the following information. A club is planning an event. The following costs are expected: Dinner per person Gift items per person Band Hall rental Tickets and advertising $18 2 $2,500 1,000 700 The club would like to charge $30 per person for the evening's activities. 5. The breakeven point for the activity in terms of how many tickets need be sold would be: a. 180 C. 350 b. 260 d. 420 e. None of the above. The answer is Answer 6. Assume that only 300 people will buy tickets. What price per ticket must be charged in order to break even? a. $26 b. 28 c. 30 d. 34 e. None of the above. The answer is Answer 7. A company believes that if it spends $50,000 on an advertising campaign for one of its segments, there will be a 40% increment in the segment's sales. The contribution margin for the segment is 60% of sales. Sales for the segment are expected to be $400,000 before the advertising campaign. The relationship of costs to sales is expected to remain the same. The incremental net operating income if the advertising campaign is undertaken is expected to be: c. $52,000 d. $58,000 a. $40,000 b. $46,000 e. None of the above. The answer is
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