Q Events'Q Events'Q Events The recommended agreed selling price between Q EventsQ Events60 specialist and analytical approach to events has made them grow in popularity and resulted in a positive impact on the market. This success has developed from their simple online platform linked with specialist event assistants to bridge the viability of events and the clients' requests. A massive Wine & Food event, Vinothon, has landed in hands and Wilson Lux has tasked you with conducting an analysis into the pricing scheme of the tickets for the event such that the client and both meet their profit targets and the client is $60 per ticket. As generates their revenue from ticket sales, they agreed to take 40% of the ticket price and an additional credit card fee of 2% of the ticket price per sale. The client agrees to take the remaining % of the ticket price.
- There are associated fixed costs comprising of salaries, maintenance and operational costs of the website, infrastructure and marketing for the event. In addition, there are variable costs for each attendee per ticket sale of $5 for individual COVID insurance costs.
- The client is happy to break-even on Vinothon because they want the event to happen and raise awareness and interest in local winemakers. They pay the cost of $15,000 for venue hire and an associated variable cost for each attendee of $20 per ticket for catering.
Problem (a) Using the above information, calculate:
(i) The break-even number of tickets which needs to be sold per event for the client.
(ii) The break-even number of tickets which needs to be sold per event for Q Events.
(iii) The revenue for Q Events at break-even.
Problem (b) Suppose the event sells enough tickets such that the client breaks even. What is the Net Profit for Q Events?
Problem (c) If Q Events wants to make a profit $4200 when they sell 600 tickets what should be the ticket price for the event? Also, how much does the client make in profit?
Problem (d) Suppose Q Events pays another $7 per ticket for premium COVID insurance and they aim to sell 600 tickets to break even, what should be the ticket price for the event?
Problem (e) In Excel, produce a break-even graph for the event in relation to Q Events and include it here. There will be 3 lines on the one graph: one for Q Event's total cost, one for Q Event's total income when the ticket price is $60 and another for Q Event's income with your calculated ticket price in part (c). On the graph, identify the general regions corresponding to profits and losses. The units along the x-axis will be the number of tickets while the units along the y-axis gives the revenue in dollars.