Solved: CVP Not for profit Monroe Classical Music Society

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CVP Not for profit Monroe Classical Music Society is a

CVP, Not for profit Monroe Classical Music Society is a not-for-profit organization that brings
guest artists to the community’s greater metropolitan area. The Music Society just bought a
small concert hall in the center of town to house its performances. The mortgage payments on
the concert hall are expected to be $2,000 per month. The organization pays its guest
performers $1,000 per concert and anticipates corresponding ticket sales to be $2,500 per
event. The Music Society also incurs costs of approximately $500 per concert for marketing and
advertising. The organization pays its artistic director $50,000 per year and expects to receive
$40,000 in donations in addition to its ticket sales.
Required
1. If the Monroe Classical Music Society just breaks even, how many concerts does it hold?
2. In addition to the organization’s artistic director, the Music Society would like to hire a
marketing director for $40,000 per year. What is the breakeven point? The Music Society
anticipates that the addition of a marketing director would allow the organization to increase the
number of concerts to 60 per year. What is the Music Society’s operating income/(loss) if it
hires the new marketing director?
3. The Music Society expects to receive a grant that would provide the organization with an
additional $20,000 toward the payment of the marketing director’s salary. What is the
breakeven point if the Music Society hires the marketing director and receives the grant?

CVP Not for profit Monroe Classical Music Society is a

ANSWER
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