Question

1. The Party Place Company wants to open a dining hall for group meetings and banquets. A survey of businesses and organizations within a 30 mile radius indicates that the Party Place can expect to provide meeting facilities to 0.75 groups per day for 360 days of the year. On average during the year, 50% of all groups would be expected to want basic food service and 30% are expected to want premium food service. Groups pay a facility rental fee of $80 per meeting. If the group requests basic food service, the facilities fee is reduced by one-half. No facilities fee is charged for groups that request premium food service. Basic food service is provided at a cost of $10 per plate and premium food service is provided at $25 per plate. Groups that request basic food service are expected to average 50 people per group. Groups that request premium food service are expected to average 30 people per group.

Based on this data, address the following requirements:

What is the number of groups that are expected to want premium food service, basic food service, and no food service during one year?

How much revenue can the Party Place expect to generate during its first year of operations?

Answer 1

According to my observation there is an typing mistake in question.quest are 75 party in a day instead of .75 so I answered as per 75 party per day..

1) 360 days * 75 party a day = 27000 party groups per year

Out of 27000 50% want basic food and 30 % want premium food

So 27000*50% = 13500 groups

27000* 30 % = 8100 groups

* Here we assume no that 20 % does not demand any food Inthe absence of any information..

2) Basic food revenue = 13500 groups * 50 people per group* 10$ = 6750000$

Premium food revenue = 8100 groups* 20 people per group* 25 $ PER PLATE = 4050000$

Total revenue on food= 10800000$

revenue of rental fee

13500 groups pay 40$ per meeting= 540000$

8100 groups does not pay any amount as stated in question

Remaining ( 27000- 13500 - 8100 = 5400) pay 80$ = 432000 $

So total rental fee = 972000

So total revenue food + rental = 11772000 $

Thanks....