A trade group is planning a seminar. It costs $1,110 to reserve a room, hire an instructor, and bring in the equipment. Assume it costs $22 per attendee for seminar materials. If we know that 18 people will attend, what price should be charged per person to break even?
Question
A trade group is planning a seminar. It costs 22 per attendee for seminar materials. If we know that 18 people will attend, what price should be charged per person to break even?
Solution
To calculate the price per person to break even, we need to first calculate the total cost of the seminar.
Step 1: Calculate the total fixed cost The fixed cost is $1,110 which includes the cost to reserve a room, hire an instructor, and bring in the equipment.
Step 2: Calculate the total variable cost The variable cost is the cost per attendee for seminar materials, which is 22 by 18 to get $396.
Step 3: Calculate the total cost The total cost is the sum of the fixed cost and the variable cost. So, 396 = $1,506.
Step 4: Calculate the price per person to break even To break even, the price charged per person should cover the total cost. So, we divide the total cost by the number of attendees. 83.67.
Therefore, the price that should be charged per person to break even is approximately $83.67.
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