Gross margin and contribution margin, the Museum of Art is preparing for its annual appreciation dinner for contributing members. Last year, 500 members attended the dinner. Tickets for the dinner we $20 per attendee, the profit report for last year’s dinner follows

This year the dinner committee does not want to lose money on the dinner. To help achieve its goal the committee analyzed last year’s costs. Of the $11,000 cost of the dinner, $6,000 were fixed costs and $5,000 w variable costs. Of the $3,000 cost of invitation and paperwork, $2,500 were fixed and $500 were variable.

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Ticket sales Cost of dinner Gross margin Invitations and paperwork Profit (loss) $10,000 (1,000) S14,000)