REQUIRED

1. How would you describe the competitive strategy of theCoastal Credit Union Music Park? Given the firm's strategy, what are the critical success factors for the Pavilion to achieve its goal of continuous annual growth in operating income?

2. Complete two selected cost-volume-profit analyses for the show illustrated in Exhibit 2, the KFBS Allstars (Think of there being two products - Regular Tickets and Comp Tickets):

a) How many tickets must theCoastal Credit Union Music Park sell to break even for KFBS?

b) How many tickets mustCoastal sell to earn $30,000 operating income after taxes, assuming a20 percent tax rate?

3. What should be the average ticket price for the KFBS concert if the fixed-pay fee is $300,000 and theMusic Park expects to sell 7,000 tickets and wants to earn $30,000 after20 percent in taxes?

4. Negotiating the fee for the KFBS Allstars: fixed-pay or per capita contracts:

a) What is the maximum fixed fee that the Pavilion can pay the KFBS Allstars if the Pavilion wants to earn $45,000 after20 percent tax and expects the show to have an average ticket price of $36.29? Assume the show is expected to draw7,000 paying ticket holders.

b) What is the maximum fixed fee that the Pavilion can pay the KFBS Allstars if the Pavilion wants to earn $45,000 after20 percent tax and expects the show to have an average ticket price of $36.29? Assume, including 25 percent comp tickets, the show is expected to be a sell-out.

c) Independent of (a) and (b), what is the maximum per capita fee that the Pavilion can pay the KFBS Allstars, whose concert is expected to be a sellout, if the Pavilion wants to earn $ 180,000 after20 percent tax from an average ticket price of $33 per ticket? (zero comp tickets can be assumed)

5. Examining the Concessions contract - see exhibit 3 where costs for concessions for all events in 2020 were reported along with the attendance at each of the events.

a) Using regression estimate the cost equation for concessions for 2020.

b) Compare the results of variable and fixed costs as indicated in your equation with the contract for concessions in Exhibit 2.

c) Make a recommendation as to whether Coastal should handle concessions in house (results for 2020) or outsource to the provider in the contract shown in Exhibit 2.

6. Problems with the parking - in 2022 Coastal finds out that its parking lot needs extensive repairs. It can be done in sections so that only one quarter will be unusable at a time but must find a solution for for additional parking for big concerts.They find two possibilities - one is close by so that event goers can walk to the venue easily - this can be rented for $2,000 for each event needed but one month notice must be given to rent it.A second option is further away and is only available to rent for the entire year for $15,000. This location would require the operating of transportation between the site and the venue when used for events. A local transportation company is willing to provide shuttle service to and from the venue for $400 per event.

a) Analyze the costs and profitability between the two parking options if Coastal continues to charge for parking consistent with Exhibit 2. You will need to make some assumptions so make those clear.

b) How would your analysis change if you could rent out spots in the further parking lot for hourly parking when it is not being used for events? Explain what information you would need and how you would apply it.

c) Besides your estimated costs, what other considerations might you use in making this decision?

		Exhibit 2
Flash Report for the KFBS Allstars Concert
Event Month		7
Event Date		07/31/22
Projected Sales
A Seats			2,978
B Seats			2,945
C Seats			1,856
D Seats			881
	Total		8,660
Ticket Price
A Seats			$ 58.00
B Seats			$ 35.00
C Seats			$ 16.00
D Seats			$ 10.00
Projected Revenue		$ 314,305.00
Average Ticket Price		$ 36.29
Guaranteed Talent Cost	$ 260,635.00
Attendance (includes Comp)	10,825
Other Ticket Revenue
Per ticket facility charge	$ 3.50
Per ticket service charge	$ 2.00
Projected Revenue from ticketing	$ 361,935.00
Per sold ticket		$ 41.79
Ancillary Revenues (per all attendees including comps)
Parking			$ 6.00
Concessions		$ 9.00
Merchandise		$ 4.00
			$ 19.00
Ancillary Contract Terms
Parking	$ 17,000.00	per event	$ 0.60	Per attendee
Concession	$ 40,000.00	per event	$ 2.70	Per attendee
Merchandise	$ 22,000.00	per event	$ 0.80	Per attendee
Fixed Cost per Event
Production		$ 24,000
Operations		$ 21,600
Advertising		$ 25,000
	Total		$ 70,600
Other Variable Costs including Insurance and supplies
			$3.00	Per attendee

		Exhibit 3
Event		Attendance		Cost
1		7,240		$ 58,475
2		13,323		$ 79,457
3		17,126		$ 80,898
4		13,268		$ 72,912
5		6,132		$ 54,080
6		15,608		$ 75,544
7		17,280		$ 77,808
8		11,883		$ 70,153
9		7,878		$ 61,529
10		13,048		$ 62,310
11		6,125		$ 50,917
12		10,525		$ 68,818
13		13,594		$ 66,779
14		8,771		$ 56,489
15		11,485		$ 62,002
16		7,119		$ 60,096
17		9,002		$ 57,992
18		9,196		$ 55,506
19		14,246		$ 76,828
20		13,921		$ 79,639
21		7,940		$ 63,089
22		13,662		$ 73,075
23		17,019		$ 74,361
24		11,593		$ 66,108
25		9,898		$ 61,427
26		11,862		$ 61,681
27		15,729		$ 83,141
28		12,038		$ 65,542
29		13,053		$ 71,967
30		10,157		$ 62,296
31		9,798		$ 61,689
32		16,007		$ 82,588
33		13,895		$ 80,288
34		9,714		$ 60,724
35		9,171		$ 60,652
36		17,366		$ 78,845
37		6,064		$ 53,922
38		16,121		$ 79,922
39		6,434		$ 51,503
40		8,393		$ 59,659
41		16,255		$ 77,314
42		14,031		$ 81,422
43		9,586		$ 62,047
44		11,475		$ 61,963
45		14,213		$ 71,780
46		11,816		$ 72,673
47		11,528		$ 62,123
48		7,448		$ 63,283
49		15,536		$ 74,806
50		10,964		$ 72,415
51		8,768		$ 55,757
52		8,886		$ 59,360
53		8,855		$ 61,386
54		16,148		$ 74,258
55		7,432		$ 58,470
56		10,504		$ 63,619
57		9,316		$ 57,829
58		14,221		$ 76,648
59		17,417		$ 78,122
60		17,609		$ 91,338
61		7,108		$ 50,122
62		7,287		$ 55,802
63		6,557		$ 55,036
64		15,556		$ 84,437
65		16,205		$ 75,557
66		6,480		$ 56,378
67		12,368		$ 64,742
68		6,200		$ 53,745
69		12,790		$ 71,682
70		17,778		$ 88,626
71		15,138		$ 70,751
72		8,232		$ 59,622
73		12,695		$ 72,990
74		6,204		$ 53,210
75		12,513		$ 68,708
76		16,399		$ 80,087
77		8,567		$ 62,368
78		15,061		$ 80,878
79		16,549		$ 85,110
80		8,055		$ 54,129