• Shelley, Jonathan, and Adrian Stein, the Fundraising Chairperson, are beginning to make plans for next year's rodeo. Shelleybelieves by negotiating with local feed stores, inn- keepers, and otherbusiness owners, costs can be cut dramatically. Jonathan agrees. Aftercarefully analyzing costs, Jonathan has estimated the fixed expenses can be pared to approximately $51,000. In addition, Jonathan estimatesvariable costs are 4% of total gross receipts. After talking with businessowners who attended the rodeo, Adrian is confident the funds solicited from sponsors will increase. Adrian is comfortable in budgeting revenue from sponsors at $25,600. The local youth group is unwilling to provide concessions to the audience unless they receive all of the profits. Not having the personnel to staff the concession booth, members of theCircular Club reluctantly agree to let the youth group have 100% of theprofits from the concessions. In addition, members of the rodeo committee,recognizing the net income from programs was only $100, decide not to sell rodeo programs next year.
• Compute the break-even point in dollars of ticketsales assuming Adrian and Jonathan are correct in their assumptions.
• Shelley has just learned you are calculating thebreak-even point in dollars of ticket sales. She is still convinced theClub can make a profit using the assumptions above (second bullet pointabove).
• Calculate the dollars of ticket sales needed to earn a target profit of $6,000.
• Calculate the dollars of ticket sales needed to earn a target profit of $12,000.