George Mathenge is a well-known motivational speaker. The Europe Speakers Bureau (ESB) wants Mathenge to be the
Question:
George Mathenge is a well-known motivational speaker. The Europe Speaker’s Bureau (ESB) wants Mathenge to be the sole speaker at an all-day seminar. Mathenge’s agent offers ESB the choice of three possible fee arrangements:
• Schedule 1: €8000 fee
• Schedule 2: €20 per person + €2000 fixed fee
• Schedule 3: €50 per person.
Each attendee will be charged a €200 fee for the all-day seminar.
Required
1. What is ESB’s fixed cost and variable cost for hiring Mathenge under each alternative schedule?
2. For each schedule, calculate the total cost and unit cost per seminar attendee if (a) 50 attend, (b) 200 attend, and (c) 500 attend. Comment on the results.
Step by Step Answer:
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan