Problem A: The Accounting Society at So. Cal. University is planning its annual fundraising extravaganza, the Bean Counter's Ball. The AS expects to charge $100 per ticket. The following projected costs were culled from last year's ball [with 200 attendees] and updated to reflect current costs: 1 Prime Rib Dinners 2 Party Favors Total Unit 6,000 400 30.00 2.00
Problem A: The Accounting Society at So. Cal. University is planning its annual fundraising extravaganza, the Bean Counter's Ball. The AS expects to charge $100 per ticket. The following projected costs were culled from last year's ball [with 200 attendees] and updated to reflect current costs: 1 Prime Rib Dinners 2 Party Favors Total Unit 6,000 400 30.00 2.00
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 40P
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Can you solve #2 a-d please
![PROBLEM SET #12: CVP Analysis
lan..
The Accounting Society at So. Cal. University is planning its annual fundraising
The AS expects to charge $100 per ticket. The
Problem A:
extravaganza, the Bean Counter's Ball.
following projected costs were culled from last year's ball [with 200 attendees] and updated to
reflect current costs:
FINANCI
ACCOUN
LIBET - LIRE IO
Total Unit
1 Prime Rib Dinners
6,000 30.00
te
400
2.00
2 Party Favors
3 Programs
600
3.00
20.00
4,000
1,000
4 Orchestra
FIN
5 Advertising
5.00
6 Commemorative Tickets
500
2.50
Ar
7 Beverly Wilshire Ballroom Rent
10,000
50.00
8 Dinner Time Entertainment
2,500
12.50
y a
• Costs - 1, 2, 3: These costs have been obtained using competitive bids based on number
ordered.
communicated to vendors 5 days prior to the event.
Costs - 4,7,8: These costs are fixed fee and must be booked far in advance.
Costs – 6: Tickets are purchased in a block and include this year's date, theme, unique
design, and logo.
fro
Each requires a minimum order of 150 and the actual number must be
CH
Pr
Required:
1. Use the information above to prepare a contribution approach income statement.
om
nent
2. Use the information in #1 to calculate the following:
Break-even in tickets and sales dollars.
e be
Lum
pri
xed
a.
b. Net income if- 150, 250, or 300 were sold.
c. Number of tickets that must be sold in order to earn - $10,000, $25,000, $50,000.
d. Assume 200 attendees, calculate price per ticket to earn - $10,000, $25,000, $50,000.
in
pard
3. The Dance committee is very concerned given your analysis and has proposed the following
changes in attempt to increase the profitability of the Ball:
Instead of individual dinners, a delicious buffet will be catered by Chano’s Fine Foods.
Costs will be $1,000 for attendance of 200-300, $1,500 for 301 to 400 patrons, $2,000 for
401 to 500 patrons, and a $500 for each increase of 100 patrons..
Party favors will be eliminated and programs will copied at Kinko's at a cost of $1 each.
The orchestra and dinner entertainment will be replaced by Tito's Party Time DJ.
Projected cost $200.
Since his parents are on vacation, Ron has offered to host the Ball at their house for a
nominal gratuity of $500.
All other costs will remain the same.
ulat
es d
300
pe s
Late
cer
e pr
a c
dai
005
ed a
erta
The costs of tickets will be reduced to $30 each and 350 people are expected to attend.
Ask
tior
a. Prepare a new contribution approach income statement.
b. Calculate the new break-even in tickets and sales dollars.
c. Calculate profits if – 300, or 450 people attended.
d. Assuming 350 attendees, calculate ticket price to earn $20,000 and $50,000
ans
e s
edu
pr
n in
45(](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc310dabc-c9a5-4e66-8a81-7696fb329513%2F383aa23e-f1f6-4ad3-b245-272ab6ade686%2Fpfw3y91g_processed.png&w=3840&q=75)
Transcribed Image Text:PROBLEM SET #12: CVP Analysis
lan..
The Accounting Society at So. Cal. University is planning its annual fundraising
The AS expects to charge $100 per ticket. The
Problem A:
extravaganza, the Bean Counter's Ball.
following projected costs were culled from last year's ball [with 200 attendees] and updated to
reflect current costs:
FINANCI
ACCOUN
LIBET - LIRE IO
Total Unit
1 Prime Rib Dinners
6,000 30.00
te
400
2.00
2 Party Favors
3 Programs
600
3.00
20.00
4,000
1,000
4 Orchestra
FIN
5 Advertising
5.00
6 Commemorative Tickets
500
2.50
Ar
7 Beverly Wilshire Ballroom Rent
10,000
50.00
8 Dinner Time Entertainment
2,500
12.50
y a
• Costs - 1, 2, 3: These costs have been obtained using competitive bids based on number
ordered.
communicated to vendors 5 days prior to the event.
Costs - 4,7,8: These costs are fixed fee and must be booked far in advance.
Costs – 6: Tickets are purchased in a block and include this year's date, theme, unique
design, and logo.
fro
Each requires a minimum order of 150 and the actual number must be
CH
Pr
Required:
1. Use the information above to prepare a contribution approach income statement.
om
nent
2. Use the information in #1 to calculate the following:
Break-even in tickets and sales dollars.
e be
Lum
pri
xed
a.
b. Net income if- 150, 250, or 300 were sold.
c. Number of tickets that must be sold in order to earn - $10,000, $25,000, $50,000.
d. Assume 200 attendees, calculate price per ticket to earn - $10,000, $25,000, $50,000.
in
pard
3. The Dance committee is very concerned given your analysis and has proposed the following
changes in attempt to increase the profitability of the Ball:
Instead of individual dinners, a delicious buffet will be catered by Chano’s Fine Foods.
Costs will be $1,000 for attendance of 200-300, $1,500 for 301 to 400 patrons, $2,000 for
401 to 500 patrons, and a $500 for each increase of 100 patrons..
Party favors will be eliminated and programs will copied at Kinko's at a cost of $1 each.
The orchestra and dinner entertainment will be replaced by Tito's Party Time DJ.
Projected cost $200.
Since his parents are on vacation, Ron has offered to host the Ball at their house for a
nominal gratuity of $500.
All other costs will remain the same.
ulat
es d
300
pe s
Late
cer
e pr
a c
dai
005
ed a
erta
The costs of tickets will be reduced to $30 each and 350 people are expected to attend.
Ask
tior
a. Prepare a new contribution approach income statement.
b. Calculate the new break-even in tickets and sales dollars.
c. Calculate profits if – 300, or 450 people attended.
d. Assuming 350 attendees, calculate ticket price to earn $20,000 and $50,000
ans
e s
edu
pr
n in
45(
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