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The Taos Museum of Southwestern Arts and Crafts (TMSAC) presents rotating exhibits of the works of artists and artisans from the Southwestern United States. Historically,

The Taos Museum of Southwestern Arts and Crafts (TMSAC) presents rotating exhibits of the works of artists and artisans from the Southwestern United States. Historically, the museum has derived its funding from three sources: grants, annual memberships, and visitor revenues. For its next fiscal year, TMSAC expects to receive $564,000 in grants from various sources. It also expects 1,255 people to be supporting members of the museum. On average, supporting members each give TMSAC $125 per year. The museum expects the following mix of visitors during its next fiscal year, each paying the amount shown in the right column of the schedule.

Type of Visitor

% of Total

Price

Regular

65

$10.00

Group

15

$ 6.00

Senior Citizen

10

$ 5.00

Student

10

$ 2.00

TMSAC has $1,125,000 in fixed expenses each year. In addition, the museum spends an average of $1.25 per visitor for handouts that describe the exhibits on display. TMSAC estimates that it has variable electric costs of $.25 per visitor. Plus, the museum offers each visitor the option of receiving an audio flash drive that describes the featured exhibit of the month. Visitors are allowed to keep the flash drive as a memento of their visit. Historically, these flash drives have cost the museum $3.00 each to produce and replicate. On average, 30 percent of the people visiting the museum have taken advantage of the free flash drive offer.

Question 1: The executive director of the museum has asked you to tell her the minimum number of visitors who must come to the museum each year in order for TMSAC to break even. Using the information given above, what is TMSACs break-even visitor volume?

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