Planning and control, feedback. In April 2007, Naomi Campbell, editor of The Daily Sporting News (DSN), decides to reduce the price per newspaper from $0.84 to $0.60, starting May 1, 2007. Actual paid circulation in April is 7.5 million (250,000 per day X 30 days). Campbell esti¬

mates that the $0.24 price reduction will increase paid circulation in May to 12.4 million (400,000 X 31 days). The actual May circulation turns out to be 13,640,000 (440,000 X 31 days). Assume that one goal of DSN is to increase operating income. The budgeted increase in circulation would enable DSN to charge higher advertising rates in later months of 2007 if those budgeted gains actually occur. The actual price paid in May 2007 was the budgeted $0.60 per newspaper.

Required 1. Distinguish between planning and control at DSN, giving an example of each.

2. Prepare a newspaper revenue performance report for DSN for May 2007 showing the actual results, budgeted amounts, and the variance.

3. Give two types of action Campbell might take based on feedback on the May 2007 circu¬

lation revenue.