Alltel Pavilion Case Appendix

Appendix
2. a)
Parking, Concession, Merchandise cost includes both fixed and variable costs.

Variable Costs = | 10% * Revenue | | | Fixed Costs = | Total expense - | Variable Cost | | | | | | Costs | Variable | Fixed | Total Cost | Parking expense | 19,767 * 10% = | 4,448 - 1,976.70 = | | | $ 1,976.70 | $ 2,471.30 | $ 4,448.00 | Concession expense | 79,273* 10% = | 43,356 - 7,927.30 = | | | $ 7,927.30 | $ 35,428.70 | $43,356.00 | Merchandise expense | 36,428 * 10% = | 17,826 - 3,642.80 = | | | $ 3,642.80 | $ 14,183.20 | $17,826.00 | Total ancillary expense | $ 13,546.80 | $ 52,083.20 | $65,630.00 | | | | | Total variable costs calculation: | | | | Total ancillary expense (variable) | $ 13,546.80 | | | Total other variable expense | $ 14,323.00 | | | Total variable costs | $ 27,869.80 | | | Total variable cost/Total revenue | $ 0.08 | | | | | | | Total fixed costs calculation: | | | | Total ancillary expense (fixed) | $ 52,083.20 | | | Guarantee/Talent costs | $ 160,635.00 | | | Production expense | $ 15,506.00 | | | Operations expense | $ 14,991.00 | | | Advertising expense | $ 20,030.00 | | | Total fixed costs | $ 263,245.20 | | | | | | | Total revenue per capita | | | | Revenue from ticketing | $ 26.99 | | | Revenue from ancillaries | $ 13.09 | | | Total revenue per capita | $ 40.08 | | |

3.
Income before tax = 30,000/(1-0.40) = 50,000

Total fixed costs calculation: | | Total ancillary expense (Fixed cost) | $ 52,083.20