The Colorado Outdoors Federation sponsors an annual banquet. This year, the guest speaker is a noted wildlife photographer and lecturer. In planning for the event, the group’s treasurer has determined the following costs:
Rental of meeting facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,250
Honorarium for speaker. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800
Tickets and advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Cost of dinner (per person) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Door prizes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800
Last year, tickets were sold at $25 per person, and 350 people attended the banquet. This year, the planning committee is hoping for an attendance of 450 at a price of $30 each.
1. a. At $30 per person, how many people must attend the banquet for the Federation to break even?
b. How much profit (loss) will occur if 450 people attend?
2. Should the Federation increase its advertising costs by $200 and its door prizes by $300 if it can expect 500 people to attend the banquet?
3. If the Federation maintains its original expected costs but reduces the price per ticket from $30 to $27, it can expect 500 people to attend the banquet. Should the Federation reduce the price of its tickets to $27 per person?