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Delta Gamma Upsilon

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Break-even and other CVP relationships
Delta Gamma Upsilon sorority is in the process of planning its annual homecoming
dinner and dance. The treasurer anticipates the following costs for the event, which
will be held at the Regency Hotel:

Room rental  300
Dinner cost (per person)  25
Chartered buses  500
Favors and souvenirs (per person)  5
Band  900

Each person would pay $40 to attend; 200 attendees are expected.

a. Will the event be profitable for the sorority? Show computations.
b. How many people must attend for the sorority to break even?
c. Suppose the sorority encouraged its members to drive to the hotel and did not
charter the buses. Furthermore, a planned menu change will reduce the cost per
meal by $2. If each member will still be charged $40, compute the contribution
margin per person.

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