The Student Senate is sponsoring the biggest Christmas dance in the University’s history. A ticket allows a couple to enjoy a dinner for two, attend the dance, and receive a favor to remember the event by. Tickets will be sold for couples only. Although a not-for-profit function, it must breakeven. Here are the costs involved:
Fixed costs of the event Variable Costs per couple
Lodge rental for the evening $1000 Party favor per ticket $2.00
Fantastic Five band 400 Dinner for two 16.00
Advertising costs 65 Waitress tip (13%) 2.08
Ticket printing (800 tickets) 150
Duplicate and mail flyer 35
5. If you are cautious, and believe only 500 tickets can be sold (but still want to give the $1000 to charity), what price should you charge per ticket (sorry – you still have to pay the printer for all 800 tickets)?
6. What is the DOL in (5) above (assume that $27 per ticket was charged, $1000 was to be given to charity, but that only 600 tickets were sold)?
