The two State Championships were for two different age groups. The Peewee B teams consisted of players aged 11-12. The Bantam B teams consisted of players aged 13-14. The Association assumed there would be an approximate total of 160 players/coaches for each of the tournaments for a total of 320 players and coaches. It was expected that all coaches and players would in attendance at the banquet regardless of cost. Based on discussions with other organizations that had hosted similar banquets, Alissa discovered that between 300 and 500 people would want to attend the banquet per level resulting in a total combined attendance of between 600 and 1,000 people for the two levels. Upon investigation, Sean and Alissa quickly learned that the City of New Ulm did not have any locations that could host a banquet of between 600 and 1,000 people. Correspondingly, they decided to host two separate banquets for the two separate levels. The first banquet for the Bantam B teams was hosted at the Brown County Convention Center ("Convention Center"). Convention Center had a capacity of 500 attendees for an event. Convention Center had a set-up fee of $1,200. The cost of the meal was $19.75 per attendee and there was a $0.50 per attendee miscellaneous charge. The second banquet for the PeeWee B teams was hosted at New Ulm Banquet Hall ("Banquet Hall"). Banquet Hall had a capacity of 500 attendees for an event. Banquet Hall had a set-up fee of $1,500. The cost of the meal was $15.50 per attendee and there was a $0.50 per attendee miscellaneous charge. In addition to the cost provided by the two facilities, the Association was responsible for providing table decorations and a guest speaker. Alissa recommended and Sean agreed that teenagers would be more excited by candy than fancy flowers or candles. Sean agreed and added that a fixed amount of candy would be easier to spread across the tables last minute if they happened to have more or less attendees than expected. It was decided that a fixed amount of \$75 would be spent on candy for table decorations for each of the two events. As for a guest speaker, based on a recommendation from a peer, Alissa was able to book a renowned sports author and motivational speaker for a discounted rate of $2,050. The speaker provided a 45 minute motivational speech at each of the events. A summary of the cost information collected by Sean and Alissa is included in Table 1 (Appendix A). In addition to collecting the cost information, Sean and Alissa needed to decide on a price for each of the banquets. In talking with other communities that had hosted similar banquets, they found a wide range of pricing options: Option 1: Make the banquet free for the players and coaches and compensate with a high price ( $35$45 per attendee) for the family and friends. Option 2: Charge a lower price for the players and coaches (\$12-S16 per attendee) and compensate with a modest price ( $24$28 per attendee) for the family and friends. Option 3: Charge the same price for all attendees. 1. What is the break-even point in banquet attendees under each of the three proposed pricing structures? ( 15 points) 2. What is the expected profit or loss under each of the three pricing structures given the three levels of attendee volumes? (15 points) 3. Assume that you are an accounting consultant working on the Association's banquet pricing structure. What recommendation would you make that best meets the Association's stated goals? ( 10 points) Table 1: Summary of Cost Information Table 2: Banquet Pricing Options per Attendee Table 3: Summary of Variable and Fixed Costs Table 4: Calculation of Players/Coaches Subsidy or Gain Legend: Input Amount Calculate Total Do Not Adjust Table 5: Calculation of Contribution Margin Per Family/Friend Table 6: Calculation of Fixed Cost Including "Players/Coaches Subsidy or Gain" Table 7: Calculated Break-Even Attendees Table 8: Pro Forma Income Statement Proving Break-Even Attendee Calculations Table 9: Sensitivity Analysis of Pricing Structures using Pro Forma Income Statements Banquet Hall Option 1 Option 2 Option 3 Revenue Family/Friends Players/Coaches Total Revenue Expenses Meal Cost Misc. Variable Cost Set-up Fee Decorations Speaker (Allocated) Total Expense Net income (Loss) Combined Net lncome (Loss) Legend: loput Amount Calculate Total The two State Championships were for two different age groups. The Peewee B teams consisted of players aged 11-12. The Bantam B teams consisted of players aged 13-14. The Association assumed there would be an approximate total of 160 players/coaches for each of the tournaments for a total of 320 players and coaches. It was expected that all coaches and players would in attendance at the banquet regardless of cost. Based on discussions with other organizations that had hosted similar banquets, Alissa discovered that between 300 and 500 people would want to attend the banquet per level resulting in a total combined attendance of between 600 and 1,000 people for the two levels. Upon investigation, Sean and Alissa quickly learned that the City of New Ulm did not have any locations that could host a banquet of between 600 and 1,000 people. Correspondingly, they decided to host two separate banquets for the two separate levels. The first banquet for the Bantam B teams was hosted at the Brown County Convention Center ("Convention Center"). Convention Center had a capacity of 500 attendees for an event. Convention Center had a set-up fee of $1,200. The cost of the meal was $19.75 per attendee and there was a $0.50 per attendee miscellaneous charge. The second banquet for the PeeWee B teams was hosted at New Ulm Banquet Hall ("Banquet Hall"). Banquet Hall had a capacity of 500 attendees for an event. Banquet Hall had a set-up fee of $1,500. The cost of the meal was $15.50 per attendee and there was a $0.50 per attendee miscellaneous charge. In addition to the cost provided by the two facilities, the Association was responsible for providing table decorations and a guest speaker. Alissa recommended and Sean agreed that teenagers would be more excited by candy than fancy flowers or candles. Sean agreed and added that a fixed amount of candy would be easier to spread across the tables last minute if they happened to have more or less attendees than expected. It was decided that a fixed amount of \$75 would be spent on candy for table decorations for each of the two events. As for a guest speaker, based on a recommendation from a peer, Alissa was able to book a renowned sports author and motivational speaker for a discounted rate of $2,050. The speaker provided a 45 minute motivational speech at each of the events. A summary of the cost information collected by Sean and Alissa is included in Table 1 (Appendix A). In addition to collecting the cost information, Sean and Alissa needed to decide on a price for each of the banquets. In talking with other communities that had hosted similar banquets, they found a wide range of pricing options: Option 1: Make the banquet free for the players and coaches and compensate with a high price ( $35$45 per attendee) for the family and friends. Option 2: Charge a lower price for the players and coaches (\$12-S16 per attendee) and compensate with a modest price ( $24$28 per attendee) for the family and friends. Option 3: Charge the same price for all attendees. 1. What is the break-even point in banquet attendees under each of the three proposed pricing structures? ( 15 points) 2. What is the expected profit or loss under each of the three pricing structures given the three levels of attendee volumes? (15 points) 3. Assume that you are an accounting consultant working on the Association's banquet pricing structure. What recommendation would you make that best meets the Association's stated goals? ( 10 points) Table 1: Summary of Cost Information Table 2: Banquet Pricing Options per Attendee Table 3: Summary of Variable and Fixed Costs Table 4: Calculation of Players/Coaches Subsidy or Gain Legend: Input Amount Calculate Total Do Not Adjust Table 5: Calculation of Contribution Margin Per Family/Friend Table 6: Calculation of Fixed Cost Including "Players/Coaches Subsidy or Gain" Table 7: Calculated Break-Even Attendees Table 8: Pro Forma Income Statement Proving Break-Even Attendee Calculations Table 9: Sensitivity Analysis of Pricing Structures using Pro Forma Income Statements Banquet Hall Option 1 Option 2 Option 3 Revenue Family/Friends Players/Coaches Total Revenue Expenses Meal Cost Misc. Variable Cost Set-up Fee Decorations Speaker (Allocated) Total Expense Net income (Loss) Combined Net lncome (Loss) Legend: loput Amount Calculate Total