C independent of a and b what is the maximum per

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c) Independent of (a) and (b), what is the maximum per capita fee that the Pavilion can pay the KFBS Allstars, whose concert is expected to be a sellout, if the Pavilion wants to earn $ 180,000 after 40 percent tax from an average ticket price of $22.12 per ticket? 5. What role does CVP analysis and operating leverage play in contract negotiations with different types of performers (fixed-fee or per capita)? Issues in Accounting Education. November 2004
The ALLTEL Pavilion Case: Strategy and CVP Analysis 559 EXHIBIT 1 ALLTEL Pavilion Stage and Seating The Pavilion can accommodate 20,000 fans with 7,000 reserved seats directly in front of the stage (covered seating in sections 1 through 9 and VIP seating) and another 13,000 on the spacious lawn. It has 78 theater-style VIP boxes that can accommodate 4, 6, or 8 people. In addition to positioning for prime viewing, patrons in VIP boxes also enjoy amenities such as wait stafFservice at their seats, personalized parking, and exclusive membership to the VIP Bar & Grill. Directly in front of sections 4, 5, 8, and 9 is seating with an elevated floor that provides excellent views of the stage for patrons with disabilities and additional seating for the hearing or visually impaired. Lawn Seating Reserved, Covered Seating Issues in Accounting Education, November 2004
560 Blocher and Chen EXHIBIT 2 Flash Report for the KFBS Allstars ARTIST NAME ACTIVITY/EVENT NUMBER EVENT MONTH EVENT DATE Projected Sales (Number of Seats) A Seats B Seats C Seats D Seats TOTAL Nutnbcr of Seats Projected Ticket Price A Seats B Seats C Seats D Seats PROJECTED NET AFTER TAX ADMISSIONS AVG TIX PRICE NET OF TAX PER PAYING PATRON TALENT% GUARANTEE/TALENT COSTS NUMBER OF PERFORMANCES DROP COUNT (includes comp tickets) Other Ticket-Related Revenue FACILITY CHARGE Per capita SERVICE CHARGE Per capita REVENUE FROM TICKETING Per capita ANCILLARY REVENUES PARKING Per capita FOOD CONCESSION Per capita MERCHANDISE Per capita RENTALS REVENUE FROM ANCILLARIES Per capita TOTAL REVENUE Per capita Concert The KFBS Allstars 10310001 7 7/31/04 2.778 2.845 1.747 881 8,251 $36.29 $22.22 $11.31 $4.92 $182,479 $22.12 88.03% $160,635 1 10,349 $24,010 $2.91 $16,172 $1.96 $222,673 $26.99 $19,767 $1.91 $79,273 $7.66 $36,428 $3.52 $0.00 $135,468 $13.09 $358,141 $34.61 (continued on next page) Issues in Accounting Education. November 21)04
The ALLTEL Pavilion Case: Strategy and CVP Analysis 561 EXHIBIT 2 (continued) Other Direct Costs PARKING CONTRACT CONCESSION CONTRACT MKRCHANDISE CONTRACT TOTAL DIRECT COSTS Per capita PERCENT OF SALES 101 AL REVENUE (from above) TOTAL DIRECT COSTS (from above) GROSS PROFIT Operating Expenses TOTAL PRODUCTION EXPENSE TOTAL OPERATIONS EXPENSE TO'IAL o n lER VAR. FXPKNSH TOTALADVERTISrNG EXPENSE TOTAL OPERATING EXP Per capita PF;RCENT OF SALES OPKRATtNG INCOME Per capita I'ERCEN r OF SALES Detail: Other Concert Variable Expense Insurance Expense per person COGS—Concession per person COGS—Merchandise Inventory per person COGS—Parking per person Other Variable Concert Expense per person TO lAI, OTHER VARIABLE EXPENSE $4,448 $43,356 $17.826 S226.265 $21.86 63.2% $358.14] $226,265 $131,876 $15,506 $14,991 $14,323 $20,030 $64,850 $6.27 18.1% $67.026 18.7% $0,17 $0.35 $1.12 $0.08 $0.02 $14,323 Issues in Accounting Education. November 2004
562 . Btocher and Chen CASE LEARNING OBJECTIVES AND IMPLEMENTATION GUIDANCE

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