Imagine that you are asked to consult with a drama club that puts on a play every year. The club asks you: How much should we charge for tickets if we want to cover our costs? You begin by listing the club’s fixed and variable costs and then make a recommendation for a ticket price.
Give the club three examples of each type of cost.
Fixed Cost
1
2
3
Variable costs
1
2
3
Example of Fixed cost for the drama club will be:
a) Costumes of the characters and artists,
b) Building where they stage the performance i.e. rent.
c) Property they use for performances. Like if they are showing a drama about Game of thrones they must have swords, a throne, and horses etc. All these things used in the performance are fixed.
Variable cost for a drama company will be:
a) salary or wages paid to the artists.
b) Bills of other utilities like make up.
c) Insurance of the good and artists working.
Get Answers For Free
Most questions answered within 1 hours.