Stubs-R-Us is a local event ticket broker. Last year, the company sold 830,000 tickets with an average commission of $8. Because of the general economic climate, Stubs expects ticket volume to decline by 25 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts. Offsetting these factors is the observation that the average commission per sale is likely to increase by 10 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year.
Stubs-R-Us is a local event ticket broker. Last year, the company sold 830,000 tickets with an average commission of $8. Because of the general economic climate, Stubs expects ticket volume to decline by 25 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees closed their accounts. Offsetting these factors is the observation that the average commission per sale is likely to increase by 10 percent because the average ticket prices are expected to be larger in the coming year. Required: Estimate commission revenues for Stubs-R-Us for the coming year.
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter6: Statistical Inference
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Problem 23P: The manager of the Danvers-Hilton Resort Hotel stated that the mean guest bill for a weekend is 600...
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Transcribed Image Text:Stubs-R-Us is a local event ticket broker. Last year, the company sold 830,000 tickets with an average commission of $8. Because of
the general economic climate, Stubs expects ticket volume to decline by 25 percent. In addition, employees at a local insurance
company headquarters accounted for 5 percent of Stubs' volume. The headquarters relocated to another state and all the employees
closed their accounts.
Offsetting these factors is the observation that the average commission per sale is likely to increase by 10 percent because the
average ticket prices are expected to be larger in the coming year.
Required:
Estimate commission revenues for Stubs-R-Us for the coming year.
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