Certified Meeting Professional (CMP) Practice Exam

How is the break-even number of attendees calculated?

1. Registration fee minus fixed costs

2. Total fixed costs divided by contribution margin

3. Contribution margin divided by variable costs

4. Registration fee plus variable costs

The correct answer is: Total fixed costs divided by contribution margin

The break-even number of attendees is calculated using the total fixed costs divided by the contribution margin, which is the amount each attendee contributes to covering the fixed costs after accounting for variable costs. The contribution margin is calculated by taking the registration fee and subtracting the variable costs associated with each attendee. This figure represents how much each additional attendee contributes towards covering the fixed costs. By dividing the total fixed costs by this contribution margin, you can determine the minimum number of attendees required to cover all expenses without making a profit or incurring a loss. Understanding this calculation is fundamental in event planning because it ensures that the event is financially viable.