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Unformatted text preview: Exercise 6-10: Break-Even Analysis (LO2, LO4, LO5) Chi Omega Sorority is planning its annual Riverboat Extravaganza. The Extravaganza committee has assembled the following expected costs for the event: Dinner (per person) $ 7 Favors and program (per person) $ 3 Band $ 1,500 Tickets and advertising $ 700 Riverboat rental $ 4,800 Floorshow and strolling entertainers $ 1,000 The committee members would like to charge $30 per person for the evenings activities. Requirement 1: Compute the break-even point for the Extravaganza (in terms of the number of persons who must attend). Break-even point persons Requirement 2: Assume that last year only 250 persons attended the Extravaganza. If the same number attend this year, what price per ticket must be charged to break even? (Omit the "$" sign in your response.) Ticket price $ Exercise 6-13: Break-Even Analysis; Target Profit; Margin of Safety; CM Ratio (LO1, LO3, LO5, LO6, LO7) Pringle Company distributes a single product. The company's sales and expenses for a recent month follow: Total Per Unit Sales $ 600,000 $ 40 Variable expenses 420,000 28 Contribution margin 180,000 $ 12 Fixed expenses 150,000 Net operating income $ 30,000 Requirement 1: What is the monthly break-even point in units sold and in sales dollars? (Omit the "$" sign in your response.) Break-even point in units sold units Break-even point in sales dollars $ Requirement 2: Without resorting to computations, what is the total contribution margin at the break-even point? (Omit the "$" sign in your response.) Contribution margin $ Requirement 3: (a) How many units would have to be sold each month to earn a target profit of $18,000? Use the contribution margin method. ...
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