The local chapter of the Rotary Foundation is planning a fundraiser. The chapter estimates that renting the auditorium and paying for the sound system and performers and other costs would come to $15,000. The chapter expects to charge $50 per person. Variable costs are negligible (i.e. assume variable costs = $0 per person).

a) What is the required attendance for the chapter to raise $21,000 toward charity?

b) The chapter also proposes to have a cash bar at the event. They estimate that the average person would spend $20 and that the contribution margin ratio for the cash bar would be 50%. In light of this additional information, what is the required attendance for the chapter to raise $21,000 toward charity?

c) Assume that they decide to have a cash bar and the event succeeds in raising exactly $21,000 for the charity. Evaluate the margin of safety and operating leverage for the event.