How many are needed for the company to break even

Question

This is for applied decision methods for business class

 

For a typical seminar, the room rental at a hotel is 1000 dollars and the cost of advertising and other incidentals is about 10,000 dollars per seminar. The cost of the materials and special gifts for each attender is 60 dollars per person attending the seminar, the company charges 250 dollars per person to attend the seminar a this seems to competitive with other companies in the same business. How many people must attend each seminar for Golden Age to break even?

Answer 1

This is a break-even point question.

 

Break Even Point = Fixed Costs / (Sales/unit - Variable cost/unit)

 

Let F = 1000 + 10,000 = 11,000

 

Let S = 250

 

Let V = 60

 

BEP = 11,000 / (250 - 60)

 

       = 11,000 / 190

 

       = 57.89 OR 58 guests