Based on the Baseball camp example covered in the class, let's assume the segment size is 5000, price per participant is $80, frequency is 1, variable cost per person is $5, TFC = $10,000, and 2% of the segment come to the camp.

Based on the assumption provided above, how many more participants do we need to break-even? Group of answer choices

A. about 42
B. about 34
C. about 54
D. about 23

The correct answer is B. about 34

Step-by-step explanation:

1. Let's review the information given to us to answer the question correctly:

Segment size = 5,000

Number of participants in the camp = 2% of 5,000 = 100  

Total Fixed Cost (TFC) = $ 10,000  

Variable Cost per Person = $ 5  

Price per Person = $ 80

2. Based on the assumption provided above, how many more participants do we need to break-even?

We can calculate the variable cost, this way:

Total Variable Cost = Variable cost per person * Number of participants  

Total Variable Cost = $ 5 * 100

Total Variable Cost = $ 500

We can calculate the total cost of the program, this way:

Total Cost of the program = Total Variable cost + Total Fixed Cost  

Total Cost of the program = $ 500 + $ 10,000

Total cost of the program = $ 10,500

We can calculate the revenue of the program, this way:

Total revenue of the program = Price per person * Number of participants  

Total revenue of the program = $ 80 * 100

Total revenue of the program = $ 8,000

Number of additional participants needed to get break-even = x

Break-Even Point: Total Cost = Total Revenue  

Total Variable cost + Total Fixed Cost = Price per person * Number of participants  

Replacing with the values we know and solving for x:

5 * (100 + x) + $ 10,000 = 80 * (100 + x)

500 + 5x + 10,000 = 8,000 + 80x

5x - 80x = 8,000 - 10,500

-75x = - 2,500

x = - 2,500/-75

x = 34 (rounding to the next whole)

The correct answer is B. about 34

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