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"Accounting First" team project

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This is our Managerial Accounting class team project. Feel free to use it as inspiration for your own CRC budgeting case (McGraw-Hill) resolution and recommendations.
Presentation is also available here: http://my.brainshark.com/Team-1-Group-Project-385735595.

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"Accounting First" team project

  1. 1. City Racquet Club Accounting First (Team 1) Christiana Alagbe, Denisa Dobrin, Brandon LeBlanc, Adrienne Motlagh, HoriaEvaluation Stoica, Donovan True New England College of Business and Finance MBA505 – Professor Rowe 02/03/13 Click for narrated presentation
  2. 2. OverviewBackgroundEvaluation:1. Key factors that CRC should consider in its evaluation of the new membership plan and fee structure2. Schedule 1 & 7: CRC’s new membership plan and fee structure improvements in cash receipts3. Other types of analyses we offer to perform for CRC in order for them to make a complete evaluation of the new membership plan and fee structure4. Explanation of how CRC’s cash management would differ from the present if the new membership plan and fee structure were adopted5. Strategic advantages and disadvantages to implementing this membership plan and fee structureSummaryReferences
  3. 3. Background City Racquet ClubCurrent Annual Membership Fees Proposed Annual Membership Fees Individual $40 Individual $250 Student $25 Family $400 Family $95 Hourly Court Fees $6 – $10
  4. 4. Evaluation #1 Key Factors of Consideration• How does a higher up-front cost change consumer demand?• Effect on membership level?• Staffing levels at CRC?• Revenues
  5. 5. Evaluation #2 CRC Revenue Budget For the year ending December 31st 20x1 1st 2nd 3rd 4th YearIndividualNumber of members 734 250 150 65 1199Annual membership rate $200 $250 $250 $250Revenue $146,800 $62,500 $37,500 $16,250 $263,050FamilyNumber of members 610 126 150 65 951Annual membership rate $300 $400 $400 $400Revenue $183,000 $50,400 $60,000 $26,000 $319,400Total Revenue $329,800 $112,900 $97,500 $42,250 $582,450
  6. 6. Evaluation #2 CRC Cash Receipt Budget For the year ending December 31st 20x1 Feb-Apr May-Jul Aug-Oct Nov-Dec 1st 2nd 3rd 4th YearSales revenue (from schedule 1) $329,800 $112,900 $97,500 $42,250 $582,450Collections in quarter of sale $329,800 $112,900 $97,500 $42,250 $582,450Total cash receipts $329,800 $112,900 $97,500 $42,250 $582,450
  7. 7. Evaluation #3Analyses to make a complete evaluation of the new membership plan and fee structure• Cost Behavior Analysis • Helps assess the impact of alternate scenarios on profit• Profit sensitivity analysis • A measurement of the affect of changes to dependent variables when changes occur in the related independent variables• Profit Multiplier Profile Analysis • Assists in measuring the impact of key changes (price, membership levels etc.) on profit
  8. 8. Evaluation #3• Marginal Cost Analysis (Break-even, profits and losses) • Assessing market profitability and the potential for competition to enter the market• Market Share Analysis • Market share can lead to market power through lower average costs and improve CRC’s influence in controlling the market price• Price Elasticity Analysis • Understanding pricing elasticity for services to maximize revenues through properly pricing services within the market
  9. 9. Evaluation #3• Analysis of Unequal Cash Flows • Accurately determine the future value• Variance Analysis • Can help determine the cost of unused resources
  10. 10. Evaluation #4 Strategic Perspective: Cash management outlook if membership plan adopted• Cash flow for the club will change• No additional revenue during the year• More even distribution of funds depending on season• A more accurate prediction of optimal cash balances in the club
  11. 11. Evaluation #5 Advantages of implementing membership plan and fee structure• Members will better utilize the court time without budget constrains• The implementation will attract new members• New plan will lead to effective cash management
  12. 12. Evaluation #5 Disadvantages of implementing membership plan and fee structure• Loss of revenue• Potential loss of members• Incurred costs can affect new membership costs
  13. 13. Summary Recommendations• New marketing strategy• Revision of budget
  14. 14. ReferencesBoulding, W., & Staelin, R. (1993). A look on the cost side: Market share and the competitive environment. Marketing Science (1986-1998), 12(2), 144-144. Retrieved from http://search.proquest.com/docview/207347863?accountid=33575.Checkley, K. (2002). Strategic cash flow management. Oxford: Capstone Pub.Coyle, B. (2000). Cash flow control. Chicago: Glenlake Pub. Co.Dick, A. S., & Lord, K. R. (1998). The impact of membership fees on consumer attitude and choice. Psychology & Marketing (1986-1998), 15(1), 41-41. Retrieved from http://search.proquest.com/docview/230396275?accountid=33575.Graham, I., & Harris, P. (1999). Development of a profit planning framework in an international chain: A case study. International Journal of Contemporary Hospitality Management, (11) 5, 198.Harris, P.J. (1992), Profit Planning (Hospitality Managers Pocket Book Series). Butterworth-Heinemann, Oxford.Hilton, R. W. (2009). Managerial Accounting: Creating Value in a Dynamic Business Environment (9th ed., pp. 458- 481). N.p.: McGrawHill.Jazayeri, Ali, and Narjes. (2011). The Effects of Price Elasticity Dynamics on a Firms Profit. Iranian Journal of Management Studies 4.1. 101-14. ABI/INFORM Complete; ProQuest Central. Web. 6 Nov. 2012.Kotas, R. (1978). The ABC of PSA. Hotel, Catering and Institutional Management Association Journal. 15-19.Kotas, R. (1986). Management Accounting for Hotel and Restaurants, 2nd ed. Surrey University Press, London.
  15. 15. ReferencesMak, Y. T., & Roush, M. L. (1996). Managing Activity Costs with Flexible Budgeting and Variance Analysis. Accounting Horizons, 10(3), 141-146. Retrieved from Business Source Premier.McDaniel, L. (2010) Rethink your membership structure The Center for Association Leadership (ASAE) Retrieved from http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=51781.Nurre, R. (n.d.). College of San Mateo. Accounting 131, Chapter 14. Retrieved from http://smccd.edu/accounts/nurre/online/chtr14.html.Pasdo, Jerome S. (1985, January). Determining the Eventual Sale Price of an Investment. Commercial Investment Journal, 4(1), 38. Retrieved January 10, 2012, from ABI/INFORM Global. (Document ID: 1019577).Reider, R., & Heyler, P. B. (2003). Managing cash flow: An operational focus. Hoboken, N.J: Wiley.Shankar, V., & Bolton, R. N. (2004). An empirical analysis of determinants of retailer pricing strategy. Marketing Science, 23(1), 28-49. Retrieved from http://search.proquest.com/docview/212290230?accountid=33575.Tsao, C. (2012). Fuzzy net present values for capital investments in an uncertain environment. Computers & Operations Research, 39(8), 1885. Retrieved January 10, 2012, from ABI/INFORM Global. (Document ID: 2549314031).Uninterruptible Power Supply . (2011). Global market size, average pricing, market share and distribution channel analysis to 2020. (2011, Dec 12). PR Newswire. Retrieved from http://search.proquest.com/docview/910221212?accountid=33575.
  16. 16. ReferencesYahya-Zadeh, M. (2012). Comprehensive variance analysis based on ex post optimal budget. Academy of Accounting and Financial Studies Journal, 16, 65-85. Retrieved from http://search.proquest.com/docview/1081980068?accountid=33575.Y, J. D. (2003, Apr 03). Flat-screen prices set to drop -makers of LCD TVs are boosting capacity in bid for market share; competition could hurt margins. Wall Street Journal. Retrieved from http://search.proquest.com/docview/308517742?accountid=33575.

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