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Breaking even at Croke ParkThe GAA Congress has supplied thefollowing information about CrokePark.ï‚›It has a seating capacity of 80,000.ï‚›Croke parkâ€™s total annual fixed costsare over â‚¬2 million per annum.ï‚›The selling price per ticket is â‚¬70ï‚›The variable cost per unit is â‚¬20ï‚›The GAA needs to know how manytickets do they need to sell in order tobreakeven?
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What are the Fixed andVariable costs for the GAA
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Questionï‚› Illustrate by means of a breakeven chart ï‚› The breakeven point ï‚› The profit at maximum capacity ï‚› The margin of safety at maximum capacity
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Step 1 â€“ Calculate theBreakeven pointï‚› Formula: (show workings) Total Fixed Costs Contribution per unit
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Step 3 â€“ Illustrate theinformation on a breakevenchart.
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Step 4 â€“ Profit at MaximumCapacityï‚› Profit = Total Revenue â€“ Total Costs
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Step 5 - Margin of Safetyï‚› How far estimated ï‚› Formula: sales can fall before the firm ï‚› Volumeof Sales â€“ becomes loss Breakeven point making
10.
Illustrate the effect on thebreakeven point if variablecosts increased to â‚¬30
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