When looking at the expenses necessary to run the Craddock cup, which of them are variable and which are fixed? For the cost identified as variable, on what bases are they variable? Identify the driver of the cost.

a) consider the concept of sunk costs and the rationale behind including or excluding such costs in determining whether Jose should keep it drop the tournament.

b) what costs are irrelevant to his decision ( costs that will be incurred even if the tournament does not continue?

  

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a photograph and profile of each player 16 years of age or older. The presence of the scouts also enabled the tournament to attract the region's best high-school teams. PROFIT STATEMENT ESTIMATES Rivaldo looked at the profit estimate for next year's Craddock Cup (Exhibit 2). He planned to use this information as the basis for his recommendations to the CYSL board. He used the following data in compiling the profit statement: 1. CYSL purchased tournament T-shirts for $6 a shirt, and sold them for $15 each. Historically, the tournament sold 10 shirts per team. 2. The Craddock Cup expended the equivalent of $15 for food and beverages per player to stock the concession stands. These concessions were sold at a 100% markup. 3. The tournament hosted two soccer clinics (one on each day of the tournament) for younger siblings of tournament participants. The participation fee was $10 per child per day; it cost CYSL $6 per child per day. The previous year, 216 children had participated in the soccer clinics each day. 4. Corporate contributions averaged $14,000 a year. Despite Rivaldo's best efforts, he had been unable to secure additional corporate sponsorships for the tournament. 5. CYSL was required to pay $1,500 every year to register the Craddock Cup with the state Youth Soccer League, and also had to pay a $4 insurance premium per player. On average, each team fielded 18 players. 6. CYSL rented 10 soccer fields from the city for 40 weeks a year for a total fee of $48,000. Although the Craddock Cup used the fields for only two days a year. Rivaldo allocated one week's rent to the Craddock Cup. In addition to the two days of tournament play, CYSL spent two days preparing the fields for the tournament and two days cleaning up after the tournament. 7. Each team played four games during the course of the tournament, and each soccer field accommodated four games a day. Currently, the Craddock Cup required the use of eight soccer fields. Additional fields could be rented from local schools at a cost of $150 per day per field, while two goals for each additional field were rented at a cost of $60 a day. 8. Two soccer balls were purchased for each field at a cost of $27 per ball. 9. Three referees were hired for each game at a cost of $100 a game ($25 each for two linesmen and $50 for the head referee). 10. Trophies were provided for each player on the winning team in each bracket. On average, each trophy cost $25. 11. The Craddock Cup defrayed approximately $80 a night in hotel costs for each college scout attending the tournament. The scouts generally stayed for two. nights. a photograph and profile of each player 16 years of age or older. The presence of the scouts also enabled the tournament to attract the region's best high-school teams. PROFIT STATEMENT ESTIMATES Rivaldo looked at the profit estimate for next year's Craddock Cup (Exhibit 2). He planned to use this information as the basis for his recommendations to the CYSL board. He used the following data in compiling the profit statement: 1. CYSL purchased tournament T-shirts for $6 a shirt, and sold them for $15 each. Historically, the tournament sold 10 shirts per team. 2. The Craddock Cup expended the equivalent of $15 for food and beverages per player to stock the concession stands. These concessions were sold at a 100% markup. 3. The tournament hosted two soccer clinics (one on each day of the tournament) for younger siblings of tournament participants. The participation fee was $10 per child per day; it cost CYSL $6 per child per day. The previous year, 216 children had participated in the soccer clinics each day. 4. Corporate contributions averaged $14,000 a year. Despite Rivaldo's best efforts, he had been unable to secure additional corporate sponsorships for the tournament. 5. CYSL was required to pay $1,500 every year to register the Craddock Cup with the state Youth Soccer League, and also had to pay a $4 insurance premium per player. On average, each team fielded 18 players. 6. CYSL rented 10 soccer fields from the city for 40 weeks a year for a total fee of $48,000. Although the Craddock Cup used the fields for only two days a year. Rivaldo allocated one week's rent to the Craddock Cup. In addition to the two days of tournament play, CYSL spent two days preparing the fields for the tournament and two days cleaning up after the tournament. 7. Each team played four games during the course of the tournament, and each soccer field accommodated four games a day. Currently, the Craddock Cup required the use of eight soccer fields. Additional fields could be rented from local schools at a cost of $150 per day per field, while two goals for each additional field were rented at a cost of $60 a day. 8. Two soccer balls were purchased for each field at a cost of $27 per ball. 9. Three referees were hired for each game at a cost of $100 a game ($25 each for two linesmen and $50 for the head referee). 10. Trophies were provided for each player on the winning team in each bracket. On average, each trophy cost $25. 11. The Craddock Cup defrayed approximately $80 a night in hotel costs for each college scout attending the tournament. The scouts generally stayed for two. nights.

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