Certified Meeting Professional (CMP) Practice Exam

Which formula is used to calculate the break-even registration fee when the number of attendees is known?

1. (Total variable costs / number of attendees) + fixed costs

2. (Total fixed costs / number of attendees) + variable costs

3. (Fixed costs - registration fee) / variable costs

4. (Total fixed costs + variable costs) / number of attendees

The correct answer is: (Total fixed costs / number of attendees) + variable costs

The correct formula to calculate the break-even registration fee when the number of attendees is known is derived from ensuring that total income equals total expenses. To break even, the revenue generated from registration fees must cover both fixed and variable costs associated with the event. In this context, calculating the break-even point involves determining how much each attendee must pay (the registration fee) to cover the total fixed costs, which don't change regardless of the number of attendees, and the average variable cost per attendee, which fluctuates depending on the number of participants. By using the formula that divides the total fixed costs by the number of attendees and then adds the average variable cost per attendee, you arrive at the desired registration fee that would yield a break-even scenario. This ensures all costs are covered when the expected number of attendees registers. The other options do not align with the principles behind break-even analysis because they either misplace the relationship between fixed and variable costs or fail to correctly represent how those costs translate into a fee per attendee.