ABC Catering Case Study - Charity Dinner - Fixed Costs - Accounting Assignment Help

Assignment Task:

ABC Catering is putting on a charity dinner. The average selling price for a ticket is $170. The variable cost for the dinner is $110. ABC will also incur fixed costs such as room rental fees and other fixed costs, totalling $30,000.

1. How many sales revenue must ABC Catering generate in order to break even?

2. How many tickets must ABC Catering attract in order to break even? Explain your answer.

3. What is ABC Catering’s profit or loss at each of the following possible ticket sales levels: 450 tickets? 500 tickets? 525 tickets?

4. If variable costs increase by 5 % per dinner guest, what is the new breakeven point in terms of sales revenue and tickets? Compare it to your answers to questions a and b, and explain the difference. NOTE: Use simple income statements to support your explanations

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