05 Question s points Seepage 246 A semiprofessional basebal

05 Question (s points) ? Seepage 246 A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the concessions 50/50 with the city but keeps all the revenue from ticket sales. The city charges the team $100 each month for the three-month season. The team pays the players and manager a total of $1000 each month. The team charges $10 for each ticket, and the average customer spends $6 at the concession stand. Attendance averages 30 people at each home game. 3rd attempt Q See Hint Part 1 (4 points) The team earns an average of with total costs of $1.13, 500 in revenue for each game and $ 85 of revenue each season. each season, the team finishes the season with S242.80 of profit. Part 2 (1 point) See Hint In order to break even, the team needs to sell 3 tickets for each game. k05/08 VIEW SOLUTION SUBMIT ANSWE 7 OF 8 QUESTIONS COMPLETED

Solution

Question 5

PART 1

Average attendance per game = 30 people

Price of each ticket = $10

Total receipts from tickets = 30 * $10 = $300

Average spending at concession stand = $6

Total receipts from concession stand = $6 * 30 = $180

Team keeps 50 percent receipts from concession stand.

So,

Receipts from concession stand to team = $180/2 = $90

Total revenue from each game = $300 + $90 = $390

Each month team plays two home games. The season is of three months.

So, a total of six games is played.

Total revenue from each season = $390 * 6 = $2,340

Rent paid to city each month = $100

Total rent paid for whole season = $100 * 3 = $300

Salaries paid each month = $1,000

Total salaries paid for whole season = $1,000 * 3 = $3,000

Total cost = $300 + $3,000 = $3,300

Profit = Total revenue - Total cost = $2,340 - $3,300 = -$960

So,

The team earns an average of $390 in revenue from each game and $2,340 of revenue each season.

With total costs of $3,300 each season, the team finishes the season with -$960 of profit.

PART 2

At break-even, total revenue equals total cost.

Let the number of tickets to be sold to breakeven be x

Total revenue from each game = ($10 * x) + ($6 * x)/2 = 10x + 3x = 13x

Total revenue from whole season = 13x * 6 = 78x

Total cost = $3,300

At break-even,

Total revenue = Total cost

78x = 3,300

x = 3,300/78 = 42.30 or 42 tickets

So,

In order to break even, the team needs to sell 42 tickets for each game.