6 problem

# 6 problem - E xercise 6-10 Break-Even Analysis(LO2 LO4 LO5...

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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

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\$ 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 evening’s 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

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\$ 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 \$

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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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