A semiprofessional baseball team near your town plays two home games each month at the local baseball park. They split the concessions 50/50 with the city, but keep revenue from ticket sales for themselves. The city charges the team $100 each month for the three-month season. The team pays the players and manager a total of $1,000 a month. The team charges $10 for each ticket, and the average customer spends $7 at the concession stand. Attendance averages 30 people at each home game. In order to break even, how many tickets does the team need to sell for each game?

Question

contestada

Respuesta :

ACCESS MORE ACCESS MORE ACCESS MORE ACCESS MORE

jepessoa jepessoa · Answer 1 · 2019-12-19T13:23:47+01:00

Answer:

41 tickets per game

Explanation:

The team's fixed monthly costs are:

$1,000 (wages and salaries) + $100 (municipal fee) = $1,100 per month

Since the team plays at home twice a month, the fixed costs allocated to each game are $550 (= $1,100 / 2).

Contribution margin per person = $10 (ticket price) + $3.50 (1/2 of concession stand's revenue) = $13.50

Break even point = fixed costs / contribution margin = $550 / $13.50 = 40.7 tickets which must be rounded up to 41 tickets per game