Real-Life Math
You are the arena facility operator for a medium-sized arena. It seats about 16,000 people, and you get a wide variety of acts coming through. In addition to dealing with the performers, athletes and patrons, you also must negotiate contracts with different vendors.
There are the regular vendors who will sell hot dogs, popcorn and beer during football games. Then there are vendors that move with acts.
Recently, you had the rock group Pearl Jam perform in the arena. With them were vendors selling T-shirts, posters and key chains with the band's logo. There are also sponsors in the arena. Corporations like Coca-Cola use wall or board space during a game to sell their products.
All contracts filter through the executive offices, which is where you are. Usually, these people pay the arena for use of the space during an event. They split a portion of the sales with the arena.
There is much bookkeeping to do, says Glenn Menard. "You have to know how to calculate percentages," he says.
"There has to be a minimum of 12th grade math," says Terry Piche. He is a manager of recreational facilities. "Every day, I use math to calculate different rental rates, or to apply different taxes."
When you come into work one morning, you must choose which vendor to use for an upcoming figure skating competition. One of the terms is 50-50, which means you will split sales down the middle. The other is offering the more attractive term of 60-40, with the higher percentage going to you.
You go with the one who is offering you more. After the competition, that vendor sold 8,765 hot dogs, 2,902 nachos and 4,101 buckets of popcorn. In addition, 5,499 draft beers and 16,111 soft drinks were sold. All the work is already done for you, the prices are listed, and enclosed in the envelope is a check for you in the amount of $25,531.70.
Here is the price list:
Hot dogs -- $2.50
Nachos -- $2.75
Popcorn -- $2
Beer -- $1.75
Soft drinks -- $1
Based on your deal of 60-40 in your favor, is this the correct amount? If not, what is the right amount? How much would you have lost if you went with the 50-50 contract?