I am not being able to find the "C" Point. After all effort i couldn't find the answer i.e. 800 Tickets. Please help me out. If any one know the procedure how to solve. Even hint to solve will also be helpful for me.
Q) ABC Ltd is planning a concert in a remote village in India. The following costs have been
estimated,
Rs.
Rent of premises 1,300
Advertising 1,000
Printing of tickets 250
Ticket sellers , security 400
Wages of ABC Ltd personnel employed at the concert 600
Fee to artist 1,000
There are no variable costs of staging the concert. The company is considering a selling price for tickets at either Rs. 4 or Rs. 5 each.
Required:
(a) Calculate the number of tickets that must be sold at each price in order to breakeven.
(b) Recalculate, the number of tickets which must be sold at each price in order to breakeven, if the artist agrees to change from a fixed fee of Rs. 1,000 to a fee equal to 25% of the gross sales proceeds.
(c) Calculate the level of ticket sales, for each price, at which the company would be indifferent as between the fixed and percentage fee alternatives. ??????????
Answers to Numerical Question.
2. (a) At price of Rs. 4 BES = 1,138 tickets
At price of Rs. 5 BES = 910 tickets.
(b) At price of Rs. 4 BES = 1,183 tickets
At price of Rs. 5 BES = 947 tickets.
(c) 800 tickets.
CAclubindia
