Prepare three contribution-format income statements for the Bullarama event based on: 5a) an optimistic projection (no onsite
Question:
Prepare three contribution-format income statements for the Bullarama event based on: 5a) an optimistic projection (no onsite competitors), 5b) a conservative projection (one onsite competitor), and 5c) a pessimistic projection (two onsite competitors). Explain and compare each of them. 6. Explain several non-financial advantages and disadvantages of attending the Bullarama event. 7. Cat and Joe’s Pig Rig operates for 180 days each year. 7a) Explain several pros and several cons of operating for 180 days. 7b) Compare/contrast the major advantages and disadvantages of operating for 180 days vs. a full year 365 days. 7c) Which would you recommend and why?
FACTS | |||||||
Regular | Special events | ||||||
sales price | $ 12.00 | sales price | $ 9.00 | ||||
variable costs | 40% | $ 4.80 | variable costs | 40% | $ 4.80 | ||
Discount | $ (1.90) | ||||||
Contribution margin | $ 7.20 | Contribution margin | $ 6.10 | ||||
per day | |||||||
Fixed costs | $10,000 | $ 55.56 | Special events one time costs | ||||
Donation | $100 | ||||||
Operational year in days | 180 | Added fuel costs | $140 | ||||
Corporate tax rates | 20% | Added car cost – fuel | $30 | ||||
Predicting daily Demand for sandwiches | |||||||
Average daily demand | 100 | ||||||
Plus or minus | 25 | ||||||
Predicting demand at a special events | |||||||
Estimated attendance | 700 | Bullarama event tickets sold | |||||
Percentage who bought food | 35% | ||||||
Predicted food buyers | 245 | ||||||
Divided by number of vendors | 3 | ||||||
Predicted sandwiches sold | 81.66667 | ||||||
Marketing budget | Zero dollars | All free social media |
Q2 BE | |||
Regular | |||
sales price | $ 12.00 | ||
variable costs | 40% | $ 4.80 | |
Contribution margin | $ 7.20 | ||
Fixed costs | $10,000 | ||
1,389 |
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac