Hyundai Automobile U.S.A. is sponsoring a charity golf tournament to raise monies for a childrens hospital in
Question:
Hyundai Automobile U.S.A. is sponsoring a charity golf tournament to raise monies for a children’s hospital in Birmingham. There are two possible venues:
• RTJ Golf Resort at Prattville, which has a fixed rental cost of $6,810. The hotel provides for meals and waiters and waitresses to serve drinks and finger f00ds at $60 per person. The green fees and cart for each person will be $35.
• Wynlakes Golf & Country Club, which has a fixed rental cost of $2,400 plus a charge of $100 per person for its own catering of meals and serving of drinks and finger foods. The green fees and cart for each person will be $40.
Hyundai budgets 55,000 in costs for administration and marketing for the event. The band will cost a fixed amount of $3,000. Tickets to this local community event will be $300 per person. All proceeds
from the event will be donated to the children’s hospital.
(a) Compute the break-even point for each venue in terms of tickets sold.
(b) At what level of tickets sold will the two venues have the same operating income?
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