OPTION 1: Crestview Country Cluba. Fixed rental cost of $1,000b. $11 per person for foodOPTION 2: Tallgrass Country Cluba. Fixed rental cost of $3,000b. A caterer who charges $8.00 per person for foodSouthwestern College has budgeted $1,800 for administrative and marketing expenses. Itplans to hire a band, which will cost another $2,000. Tickets are expected to be $35 perperson. Local business supporters will donate any other items required for the event.A) Which option provides the least amount of risk?A) Option oneB) Option twoC) Both options provide the same amount of risk.D) Neither option has risks.E) Without probability assignments, it is not possible to determine the riskier option.2B) What is the break-even point in units for each option?A) 96 units and 114 units, respectivelyB) 120 units and 187 units, respectivelyC) 56 units and 137 units, respectivelyD) 200 units and 252 units, respectivelyE) 156 units and 219 units, respectivelyC) What is the operating income for each option if 600 people attend?A) $14,400 and $12,400 respectivelyB) $9,800 and $10,200 respectivelyC) $8,000 and $8,400 respectivelyD) $7,900 and $8,000 respectivelyE) $9,600 and $9,400 respectivelyD) What is the degree of operating leverage for each option if 600 people attend?A) 1.37 and 1.75 times, respectivelyB) 1.5 times and 1.72 times, respectivelyC) 1.10 and 1.29 times, respectivelyD) 0.75 and 1.07 times, respectivelyE) Operating leverage is indeterminable.

“Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Answered: OPTION 1: Crestview Country Club a.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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