2-32 Total costs and unit costs, service setting. The Big Event (TBE) recently started a business organiz- ing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you for an analysis of costs-what costs are fixed, what costs are variable, and so on, for each event. You have the following cost information: Music costs: £10,000 per event Catering costs: Food: £65 per guest Setup/cleanup: £15 per guest Fixed fee: £4,000 per event ISOS, youn 219motau5 of gnite fral pinayni peibnedane M phiqgina 291utxit.a1012 21800 TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form of advertising. This has proved quite effective, and the caterer gives TBE a discount of £5 per guest in exchange for allowing the caterer to advertise. 2900BW 1. Draw a graph depicting fixed costs, variable costs, and total costs for each event versus the number of guests. 000 29uneva 2. Suppose 150 persons attend the next event. What is TBE's total net cost and the cost per attendee? 3. Suppose 200 persons attend the event. What is TBE's total net cost and the cost per attendee?0 .[ 4. How should TBE charge customers for its services? Explain briefly. afsta smooni sdt ensqer9 S
2-32 Total costs and unit costs, service setting. The Big Event (TBE) recently started a business organiz- ing food and music at weddings and other large events. In order to better understand the profitability of the business, the owner has asked you for an analysis of costs-what costs are fixed, what costs are variable, and so on, for each event. You have the following cost information: Music costs: £10,000 per event Catering costs: Food: £65 per guest Setup/cleanup: £15 per guest Fixed fee: £4,000 per event ISOS, youn 219motau5 of gnite fral pinayni peibnedane M phiqgina 291utxit.a1012 21800 TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form of advertising. This has proved quite effective, and the caterer gives TBE a discount of £5 per guest in exchange for allowing the caterer to advertise. 2900BW 1. Draw a graph depicting fixed costs, variable costs, and total costs for each event versus the number of guests. 000 29uneva 2. Suppose 150 persons attend the next event. What is TBE's total net cost and the cost per attendee? 3. Suppose 200 persons attend the event. What is TBE's total net cost and the cost per attendee?0 .[ 4. How should TBE charge customers for its services? Explain briefly. afsta smooni sdt ensqer9 S
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 57P: Identifying Fixed, Variable, Mixed, and Step Costs Consider each of the following independent...
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Transcribed Image Text:2-32 Total costs and unit costs, service setting. The Big Event (TBE) recently started a business organiz-
ing food and music at weddings and other large events. In order to better understand the profitability of the
business, the owner has asked you for an analysis of costs-what costs are fixed, what costs are variable,
and so on, for each event. You have the following cost information:
Music costs: £10,000 per event
Catering costs:
Food: £65 per guest
Setup/cleanup: £15 per guest
Fixed fee: £4,000 per event
MA EMR3T 1200 OT MOITO AS
ghits
notnavni seibnerbre
phiqgina
291utxit a1012 no noiteibeiged
ISOS I young
219m0Jau of
elado
TBE has allowed the caterer, who is also new in business, to place business cards on each table as a form
of advertising. This has proved quite effective, and the caterer gives TBE a discount of £5 per guest in
exchange for allowing the caterer to advertise.
290nswolle bns amuten
1. Draw a graph depicting fixed costs, variable costs, and total costs for each event versus the number
of guests. 000,88
29uneva
2. Suppose 150 persons attend the next event. What is TBE's total net cost and the cost per attendee?
3. Suppose 200 persons attend the event. What is TBE's total net cost and the cost per attendee?
4. How should TBE charge customers for its services? Explain briefly. atsta smooni art ense19
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