Reference no: EM132547553
Iqra University is planning a concert university.
The university is considering a selling price for tickets at either RS 2,000 or RS 4,000 each
The following are the estimated costs of the proposed concert
RS
Advertising 250,000
Wages of Iqra University Personnel employed at the concert 600,000
Printing of tickets 350,000
Fee of singer 2,500,000
Ticket sellers, security 200,000
Printing of tickets 500,000
Required:
Question i. Calculate the number of tickets which must be sold at each price to achieve break-even point, if the singer agrees to change from fixed fee of RS 2.5 million to a fee equal to 25% of the contribution margin.
Question ii. Calculate the level of ticket sales for each price, at which the company would be indifferent as between the fixed and percentage fee alternative.