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Question - Red Carpet Catering is putting on a charity dinner for the United Way. The average selling price for a ticket is $185. The variable cost for the dinner is $78. Red Carpet will also incur fixed costs such as room rental fees and DJ costs, totalling $52,000.
a. What is the break-even point in terms of tickets, for Red Carpet?
b. What is the dollar sales volume the firm must achieve in order to reach its break-even point?
c. What would be the firm's profit or loss at each of the following possible ticket sales levels: 300 tickets? 500 tickets? 750 tickets?
d. If variable costs increase by an extra $8 per dinner guest. What is the new pm point in terms of tickets?
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