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Breaking even at Croke ParkThe GAA Congress has supplied thefollowing information about CrokePark.It has a seating capacity of 80,000.Croke park’s total annual fixed costsare over €2 million per annum.The selling price per ticket is €70The variable cost per unit is €20The GAA needs to know how manytickets do they need to sell in order tobreakeven?
What are the Fixed andVariable costs for the GAA
Question Illustrate by means of a breakeven chart The breakeven point The profit at maximum capacity The margin of safety at maximum capacity
Step 1 – Calculate theBreakeven point Formula: (show workings) Total Fixed Costs Contribution per unit
Step 2 - Calculations Workings
Step 3 – Illustrate theinformation on a breakevenchart.
Step 4 – Profit at MaximumCapacity Profit = Total Revenue – Total Costs
Step 5 - Margin of Safety How far estimated Formula: sales can fall before the firm Volumeof Sales – becomes loss Breakeven point making
Illustrate the effect on thebreakeven point if variablecosts increased to €30
Evaluate the benefits of aBreakeven chart
The GAA has suggested that in orderto plan for the future a realistic SWOTanalysis needs to be carried out