costal union case study ... NOT PAVILLION

4. Negotiating the fee for the KFBS Allstars: fixed-pay or per capita contracts: a) What is the maximum fixed fee that the Pavilion can pay the KFBS Allstars if the Pavilion wants to earn $45,000 after 20 percent tax and expects the show to have an average ticket price of $36.29? Assume the show is expected to draw 7,000 paying ticket holders. b) What is the maximum fixed fee that the Pavilion can pay the KFBS Allstars if the Pavilion wants to earn $45,000 after 20 percent tax and expects the show to have an average ticket price of $36.29? Assume, including 25 percent comp tickets, the show is expected to be a sell-out. C) Independent of (a) and (b), what is the maximum per capita fee that the Pavilion can pay the KFBS Allstars, whose concert is expected to be a sellout, if the Pavilion wants to earn $ 180,000 after 20 percent tax from an average ticket price of $33 per ticket? (zero comp tickets can be assumed) 5. Examining the Concessions contract - see exhibit 3 where costs for concessions for all events in 2020 were reported along with the attendance at each of the events. a) Using regression estimate the cost equation for concessions for 2020. b) Compare the results of variable and fixed costs as indicated in your equation with the contract for concessions in Exhibit 2. c) Make a recommendation as to whether Coastal should handle concessions in house (results for 2020) or outsource to the provider in the contract shown in Exhibit 2