Spinnaker Museum of Salling (SMS) is a popular tourist site in a coastal town. The museum...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Spinnaker Museum of Salling (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of both current salling exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like many museums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on- site. The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visits from the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on. The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July 1. SMS expects 250,000 visitors in the next fiscal year. Labor (variable) Miscellaneous (variable) Supervision (fixed) Miscellaneous (fixed) The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum. The museum director has received a proposal from Gitre Operations to provide staff and some other services for the Visitor Division. Gitre has proposed a fee of $15 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor cost and 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40 percent of the miscellaneous fixed costs. Required: a1. What are the costs of staffing Interally versus accepting the Gitre proposal? a2. Do you recommend that SMS accept the proposal from Gitre to provide staff and other services to the Visitor Division? b. The marketing director Informs the museum director that based on the latest economic conditions, the museum now is forecasting only 150,000 visitors for the upcoming fiscal year. b1. What are the costs of staffing interally versus accepting the Gitre proposal? b2. Do you recommend that SMS accept the proposal from Gitre to provide staff and other services to the Visitor Division? c. At what forecasted attendance level will SMS be Indifferent between staffing the Visitor Division Internally and accepting the proposal from Gitre Operations? d. The museum director is confident that the museum will attract 250,000 visitors next year. The Board of Directors at SMS is encouraging the director to negotiate a lower fee with Gitre Operations. With 250,000 visitors, what fee would make SMS Indifferent between staffing the Visitor Division Internally and accepting the proposal from Gitre Operations? Req A1 Complete this question by entering your answers in the tabs below. Labor Req A2 Miscellaneous (variable) Supervision Miscellaneous (fixed) Gitre fee Total cost $2,200,000 1,125,000 Req B1 560,000 595,000 Req B2 What are the costs of staffing interally versus accepting the Gitre proposal? (Enter your answers in thousands. (i.e., 5,400,400 should be entered as 5,400.4).) Staff Internally $ Req C (All Costs in Thousands of Dollars) Accept Gitre Proposal Req D 0 Difference Spinnaker Museum of Salling (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of both current salling exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like many museums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on- site. The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visits from the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on. The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July 1. SMS expects 250,000 visitors in the next fiscal year. Labor (variable) Miscellaneous (variable) Supervision (fixed) Miscellaneous (fixed) The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum. The museum director has received a proposal from Gitre Operations to provide staff and some other services for the Visitor Division. Gitre has proposed a fee of $15 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor cost and 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40 percent of the miscellaneous fixed costs. Required: a1. What are the costs of staffing Interally versus accepting the Gitre proposal? a2. Do you recommend that SMS accept the proposal from Gitre to provide staff and other services to the Visitor Division? b. The marketing director Informs the museum director that based on the latest economic conditions, the museum now is forecasting only 150,000 visitors for the upcoming fiscal year. b1. What are the costs of staffing interally versus accepting the Gitre proposal? b2. Do you recommend that SMS accept the proposal from Gitre to provide staff and other services to the Visitor Division? c. At what forecasted attendance level will SMS be Indifferent between staffing the Visitor Division Internally and accepting the proposal from Gitre Operations? d. The museum director is confident that the museum will attract 250,000 visitors next year. The Board of Directors at SMS is encouraging the director to negotiate a lower fee with Gitre Operations. With 250,000 visitors, what fee would make SMS Indifferent between staffing the Visitor Division Internally and accepting the proposal from Gitre Operations? Req A1 Complete this question by entering your answers in the tabs below. Labor Req A2 Miscellaneous (variable) Supervision Miscellaneous (fixed) Gitre fee Total cost $2,200,000 1,125,000 Req B1 560,000 595,000 Req B2 What are the costs of staffing interally versus accepting the Gitre proposal? (Enter your answers in thousands. (i.e., 5,400,400 should be entered as 5,400.4).) Staff Internally $ Req C (All Costs in Thousands of Dollars) Accept Gitre Proposal Req D 0 Difference
Expert Answer:
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
The following information applies to the questions displayed below Dower Corporation prepares its financial statements according to IFRS On March 31, 2021, the company purchased equipment for...
-
The following information applies to the questions displayed below Juan Diego began the year with a tax basis in his partnership interest of $50,000 During the year, he was allocated $20,000 of...
-
Required information The following information applies to the questions displayed The following financial statement information is from five separate companies. Required 1. Answer the following...
-
You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. a. What are the betas of Stocks X and Y? b. What are the required rates of...
-
Based on the data presented in Exercise, assume that DirectCall Company uses the product cost concept of applying the cost-plus approach to product pricing. a. Determine the total manufacturing costs...
-
Keystone Corporations financial statements for the year ended December 31, 2020, were authorized for issue on March 10, 2021. The following events took place early in 2021. a. On January 10, 10,000...
-
Suppose an investor has exponential utility function $U(x)=$ $-e^{-a x}$ and an initial wealth level of $W$. The investor is faced with an opportunity to invest an amount $w \leq W$ and obtain a...
-
Use the income statement for Hargrove Dynamics, Inc., for the past year ended December 31, 2011, and the information from the comparative balance sheets shown for the beginning and the end of the...
-
Problem I The post-closing trial balances of two proprietorships on January 1, 2017, are presented below. Wonder Company Dr. Cr. Cash Accounts receivable $ 9,500 Price Company Dr. $ 6,000 Cr. 15,000...
-
Sara-Jayne Parsons is an architect who operates her own business. The accounts and transactions for the business follow. INSTRUCTIONS 1. Analyze the transactions for January 20X1. Record each in the...
-
Michael is a mixed income earner. He is a self-employed resident citizen and currently the finance manager of Hallie Corporation. The following data were provided for the year 2021. Compensation...
-
Considering the entertainment value of sport, how can athletes best engage in activism within this context?
-
If you oversaw the corporate communication for MLS NEXT, what communication strategies would you implement for your different stakeholders (coaches, players, parents, community members, etc.)?
-
What kinds of responsibilities do sports organizations have regarding diversity, equity, and inclusion? How do these responsibilities differ for youth leagues versus adult leagues?
-
Discuss whether Take a Knee truly embodied a self-inflicted athlete reputational crisis. How might this form of crisis be viewed as avoidable or manageable in the context of athlete activism? How can...
-
What responsibility do professional sport teams have in social and political debates? Does the same apply to collegiate and youth teams?
-
A thin metal plate has a density given by p(x, y) = 2x + y. A machine part, as shown in the figure below, was cut from the metal plate. Determine the mass of the machine part. Method 1: calculate x...
-
What kind of rays are X-rays?
-
On July 1, 2012, Ted, age 73 and single, sells his personal residence of the last 30 years for $365,000. Ted's basis in his residence is $35,000. The expenses associated with the sale of his home...
-
Indicate whether each of the items listed below would be included (I) in or excluded (E) from gross income for the 2012 tax year. ________a. Welfare payments ________b. Commissions ________c. Hobby...
-
David and Darlene Jasper have one child, Sam, who is 6 years old. The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David's Social Security number is 577-11-3311, Darlene's is...
-
For the periodic processes shown below: a. Schedule the processes using an RMS policy. b. Schedule the processes using an EDF policy. In each case, compute the schedule for an interval equal to the...
-
For the periodic processes and deadlines given below: a. Schedule the processes using RMS. b. Schedule using EDF and compare the number of context switches required for EDF and RMS Process Time...
-
For the periodic processes given below, find a valid schedule a. using standard RMS; b. adding one unit of overhead for each context switch. 22 P2 P1 P3 Process P1 P2 P3 Time Deadline 2 30 57 40 120...
Study smarter with the SolutionInn App