Question

The Dallas Armadillos, a minor-league baseball team, play their weekly games in a small stadium just outside Dallas. The stadium holds 6,000 people, and tickets sell for $20 each. The franchise owner estimates that the team’s annual fixed expenses are $360,000, and the variable expense per ticket sold is $2. (In the following requirements, ignore income taxes.)

Required:
1. Draw a cost-volume-profit graph for the sports franchise. Label the axes, break-even point, profit and loss areas, fixed expenses, variable expenses, total-expense line, and total-revenue line.
2. If the stadium is two-thirds full for each game, how many games must the team play to break even?



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  • CreatedApril 22, 2014
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