[birdbob]

An initial market assessment tickets shows the following demand:
Price per ticket($) Tickets demand
150 10,000
130 20,000
100 50,000
80 80,000
50 120,000
30 150,000
The stadium capacity is limited to 150,000 people.The budgeted variable cost associated per person attending are $15 and fixed costs are $900,000.Determine the ticket price that will maximise profit:
a/the ticket sale and profit
b/number of tickets that would need to be sold to break even
c/margin of safety
I have calculated the ticket price that will maximise profit is $80
profit=revenue-variable cost-fixed cost
=($80x80,000)-($15x80,000)-$900,000=$4,300,000
You can help me to calculate the next,break even in unit... thnks a lot

[jakester]

birdbob -

to calculate breakeven per unit, try the following equation:

FC / (Price Per unit - Variable Cost Per Unit). Plug your answer into the following equation:

$0 = breakeven units * (sale price - variable cost) - fixed costs.

Let me know what you got... I know the answer but I want you to figure it out yourself.

[birdbob]

The number of tickets that would need to be sold to break even is 13,846.154 tickets .
How to calculate the Margin of safety?

[jakester]

birdbob - do you know the formula for margin of safety?

Come on, buddy, I'm not going to do your homework for you... try it yourself and show me your answer; I'll let you know if you are right. Your breakeven amount is correct, by the way.

[birdbob]

margin of safety = planned unit sales - break even unit sales
= 80,000 - 13,846.154 =...
is it correct?