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The Parent Teacher Association (PTA) of Meadow High School is planning a fund-raising campaign. The PTA is considering the possibility of hiring Eric Logan, a
The Parent Teacher Association (PTA) of Meadow High School is planning a fund-raising campaign. The PTA is considering the possibility of hiring Eric Logan, a world-renowned investment counselor, to address the public. Tickets would sell for $34 each. The school has agreed to let the PTA use Harville Auditorium at no cost. Mr. Logan is willing to accept one of two compensation arrangements. He will sign an agreement to receive a fixed fee of $11,400 regardless of the number of tickets sold. Alternatively, he will accept payment of $19 per ticket sold. In communities similar to that in which Meadow is located, Mr. Logan has drawn an audience of approximately 600 people. Required a. Present a statement showing the expected net income assuming 600 people buy tickets. b-1. Assume the PTA pays Mr. Logan a fixed fee of $11,400. Determine the amount of net income that the PTA will earn if ticket sales are 15 percent higher than expected. Calculate the percentage change in net income. b-2. Assume the PTA pays Mr. Logan a fixed fee of $11,400. Determine the amount of net income that the PTA will earn if ticket sales are 15 percent lower than expected. Calculate the percentage change in net income. b-3. Assume the PTA pays Mr. Logan $19 per ticket sold. Determine the amount of net income that the PTA will earn if ticket sales are 15 percent higher than expected. Calculate the percentage change in net income. b-4. Assume the PTA pays Mr. Logan $19 per ticket sold. Determine the amount of net income that the PTA will earn if ticket sales are 15 percent lower than expected. Calculate the percentage change in net income. d-1. Which type of cost structure (fixed or variable) produces the higher growth potential in profitability for a company? d-2. Which type of cost structure (fixed or variable) faces the higher risk of declining profitability for a company? d-3. Under what circumstances should a company seek to establish a fixed cost structure? d-4. Under what circumstances should a company seek to establish a variable cost structure
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