Complete next year's budgeted figures for each entity within the same Excel worksheet (yellow cells) include your reasoning for most of the budgeted figures (green cells)

Because of a bad recession, government grants were not cut by 50% but are eliminated completely for next year's budget and fundraising effortsdespite an increase in expensesdid not improve at all. Write a memo of 300400 words explaining what you would recommend that the museum manager do.

2 3 Assumptions | For-Profit 1/20% of marketing expenses are fixed; the rest are variable, all other expenses are fixed 2 Next year they plan to double their fixed marketing expenses and as a result will increase ticket sales by 25%. 3 Gift shop sales vary directly with ticket sales, gift shop COGS is 50% of sales but is expected to grow to 55% of sales. 1 Nonprofit 1 Ticket sales are low because the restricted government grants are to subsidize ticket prices just to children 12 and under. 2 It is expected that total children and adult traffic will increase 25% as the result of increased marketing expenses. 3120% of marketing expenses are fixed; the rest are variable, all other expenses are fixed 4 The adult child ratio of visitors will remain the same as this year. 5 The fundraising effort will help pay for gift shop inventory such that COGS for the gift shop will drop from 50% to 40%. 6 Gift shop sales will continue to vary directly with ticket sales. 7|Next year they plan to double their fixed marketing expenses, and as a result will increase ticket sales by 25% 8 To be able to subsidize the increase ticket sales they will have to double fundraising to $200,000. This will require an additional fundraising expense of $50,000 beyond this year's level, plus an additional $20,000 of salaries for additional headcount. 9 Due to the lower tax revenue of the city government from the recession, the museum's grant will be cut by half. A B C D E F G H I J K For-Profit Dinosour Museum Income Statement Nonprofit Dinosaur Museum Statement of Activities This Yr Next Yr Budget Reason This Yr Next Yr Budget Reason $600,000 200,000 800,000 Operating revenues Ticket sales Gift shop sales Total Operating Revenue $100,000 200,000 300,000 8 Ticket sales 9 Gift shop sales 10 Total sales 11 12 Salaries & benefits 13 Gift shop COGS 14 Marketing 15 Maintenance 16 Skeleton depreciation 17 Building lease 18 Utilities 19 Interest on debt 20 100,000 100,000 100,000 90,000 20,000 20,000 40,000 40,000 Operating Expenses Salaries & benefits Gift shop COGS Marketing Maintenance Skeleton depreciation Building lease Utilities Interest on debt Total operating expenses Operating income Non-operating Revenue Fundraising Govt. Grants [Fundraising expenses] Net non-operating revenue Increase in net assets 200,000 100,000 100,000 80,000 10,000 120,000 50,000 40,000 700,000 (400,000) 21 22 Total expense 23 Before tax income 24 Tax @ 40% 25 After-tax income 510,000 290,000 (116,000) 174,000 174,000 (165,000) 247,500 100,000 200,000 (40,000) 260,000 (140,000) 200,000 100,000 (90,000) 210,000 (175,000) Net assets at beg. of yr. Net assets at end of yr. 490,000 350,000 350,000 175,000