Question: Party Planner is considering two options, as follows: Pay a variety entertainer (a comedian who is also a musician) a fixed amount of $10,000

Party Planner is considering two options, as follows:

● Pay a variety entertainer (a comedian who is also a musician) a fixed amount of $10,000 and $100 per job

● Pay the entertainer $600 per job

a. How many jobs must be booked for both options to cost the same amount?

b. Which option is cheaper for Party Planner if 10 jobs are booked? If 30 jobs are booked?

c. Higher risks are associated with high fixed costs at low volumes and would be applicable if the company is unsure about booking sufficient venues. Besides the expected quantity of jobs, what other information is relevant for Party Planner before making the decision?

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