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Quest Coaching Systems (QSC) offers coaching seminars for personal development in topics such as networking, building relationships, work/personal time balance, and goal setting. A relatively new seminar, offered previously in Edmonton, is called ” Creative Goal Setting for Accountants.” QSC is considering running this seminar in Calgary for the first time in Hotel Suburb, three hours per evening on four consecutive Tuesdays(12 hours total).

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The seminar would be priced at $550 per person.( A book must be purchased but can be obtained independent of QSC through booksellers.) Variable costs per person attending the seminar are : catering, $60; supplies,$36; written feedback on seminar assignments, $24; and a royalty paid to the firm that  designed the seminar, $100. Fixed seminar costs are : instructor compensation, $3000; advertising, $1500; and administrative expenses, $250.

QSC can rent a small conference room in Hotel Suburb with a capacity of 20 students at a cost of $800 for all four evening. There is also a large conference room available in the same hotel with a capacity of 50 students, costing $1500 in total. QSC must commit to its choice of conference rooms three months in advance of the first seminar date, but registrations are accepted until the first date. The seminar ran twice in Edmonton; 18 people registered the first time and 23 the second.

QSC would like to know, in terms of number of people who register, the break-even point for the first Calgary run of the Creative Goal Setting for Accountants seminar. Will renting the large room versus the small room have any impact on the break-even point?

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QSC is concerned about the registration and want to make a profit on the seminar. If  QSC rents the small conference room in Hotel Suburb and 18 people (equal to the first run in Edmonton) register, what price per person must be charged in order to meet a profit goal for the seminar of $3000?

QSC is pursuing another alternative. QSC can rent a conference room (capacity 40 students) in Central Hotel at a total cost of $3000. Central Hotel is in a better location that Hotel Suburb, in downtown Calgary, and consequently QSC would price the seminar at $650 per person if it were held there. Central Hotel would provide catering at a cost $50 per person; all other cost behavior would be unchanged. At what registration( number of people attending) would profit or loss be the same whether using the Central Hotel conference room or the large room in Hotel Suburb?

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QSC wants to know which room to use: Hotel Suburb(small room), Hotel Suburb( large room), or Central Hotel. The company has requested that MACS provide the maximum profit potential for each scenario. In addition, QSC would like MACS to identify any other quantitative or qualitative risk factors that should be considered.

Small Room Large Room Central Hotel Price per person$550$550650Number of students182323Total revenue$9,900$12,650Variable costcatering606050Supplies363636Feedback expenses24…

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