Reference no: EM132970758

Rich conducts short seminars as a means of generating sales leads for his business. The seminars are popular and conducted at a local hotel. Because the seminars are very effective at generating leads, Rich does not care about making a profit from them. Instead, he sets the registration fee to just break-even by estimating total costs and dividing that cost by the expected number of attendees. If the number of attendees equals his estimated number of attendees, he has the exact dollar amount needed to pay the hotel invoice at the end of the day. The estimated the cost of the latest seminars to require $1,000 in fixed costs and $25.00 in variable costs per attendee. Based on this information, Rich set the registration fee at $35.00 per attendee.

Required:

Problem 1: The cost function Rich used to estimate the costs was completely accurate and every attendee paid the required registration fee of $35.00. At the end of the day when he tallied up his receipts, he found he had collected $3,150.00. Compared to the invoice amount presented by the hotel for the seminar, Rich found that:

a. The receipts exactly covered the bill.

b. The receipts did not cover the total cost of the seminar and he had to pay out of his own funds $_________________________ (An exact dollar amounts expected if you select this answer)

c. The receipts more than covered the cost of the seminar and he found he had an extra $______________________ after paying the bill. (An exact dollar amount expected if you select this answer.