Year the existing venue size can accommodate both

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year, the existing venue size can accommodate both scenarios.The facilities at the fairgrounds are adequate to handle crowds needed to generate ticket revenues toearn a $6,000 profit. For $6,000 in profits to be earned, the rodeo must sell 4,020 tickets, generating$34,971 in revenue. The arena at the fairgrounds holds 2,500 patrons, so even if expected attendancefor Friday was 1084, Saturday was 2007, and Sunday was 928, there would still be plenty of seatsavailable for future growth and ticket sales. However, if the rodeo continues to be successful and grow,a bigger venue may be needed if ticket sales exceed 2,500 for any of the three nights.The expenses related to Shelley’s purchase of rodeo clothing are not relevant costs. Relevant costsare costs and revenues that differ across alternatives. Whether the Circular Club chooses to continuethe annual rodeo or not, the price of the clothes is not going to change and has no relevance to thedecision. The costs associated with the purchase of her clothes are sunk costs. Sunk costs are coststhat have already been incurred and will not be changed by any decision being made presently or inthe future.We would encourage the Circular Club to place the $600 Major Sponsor banners for Shady’s BAR-B-Q, to cater the event, and The Fun Shop, in exchange for donating the tent. This would replace thehospitality tent and save on expenses. Instead of paying $3,341 for catering and tent rental for threedays, the Club would pay $1,200 total. Now, if there were limited space for signs, we wouldrecommend that unless the revenue generated from additional signs would exceed more than $1,200,then it certainly would not be worth the Major Sponsorship banners since we would be sacrificingrevenue which could be made from the sale of the banners. A cost that may be considered in this

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Term
Fall
Professor
COLE
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