Paul Has Decided to Start a Musical Venue That Also

question 92

Essay

Paul has decided to start a musical venue that also includes a restaurant and an art gallery.His brother suggested he talk to a consultant to develop his business plan.What should Paul look for when searching? What issues should be determined before the consultant is hired?

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Definitions:

Mixed Costs

Expenses that contain both fixed and variable components, changing in total with the level of activity but not directly proportional.

Contribution Format

An income statement format that separates fixed costs from variable costs, showing the contribution margin of sales over variable costs.

External Reporting

The process of preparing and presenting financial and other information to parties outside the organization.

Traditional Format

In accounting, it refers to the conventional way of reporting income statements, segmenting costs into categories like cost of goods sold, operating expenses.