Exercise 1-33 (Static) Cost Data for Managerial Purposes (LO 1-3)

One of the major activities of the City Art Museum (CAM) is a Neighborhood Outreach Program, which was developed both as a public service and to market the museum and its other programs. One of the Outreach offerings, which is popular with both city and suburban residents, is the weekly Evening Lecture Series. The Series provides lectures on local art and history in various locations throughout the greater metropolitan area.

A new museum director has been hired with the goal to make the museum more self-sustaining and less reliant on donations and government grants. One of the director's first actions was to ask the museum staff to put together detailed financial information on the individual activities. The result, shown in the accompanying table, indicates that the series operates at a loss.

CITY ART MUSEUMNeighborhood Outreach: Evening Lecture SeriesFor the Year Ending June 30Sales revenue$ 386,000Costs Advertising$ 15,000Lecturer fees and expenses195,000Operating costs (staff)26,000Space rental12,000Food and bevarage expenses25,000Allocated museum overhead143,000Total costs$ 416,000Net loss$ (30,000)