"accounting first" team project

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City Racquet Club Evaluation Accounting First (Team 1) Christiana Alagbe, Denisa Dobrin, Brandon LeBlanc, Adrienne Motlagh, Horia Stoica, Donovan True New England College of Business and Finance MBA505 – Professor Rowe 02/03/13 Click for narrated presentation

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This is our Managerial Accounting class team project. Feel free to use it as inspiration for your own CRC budgeting case (McGraw-Hill) resolution and recommendations. Presentation is also available here: http://my.brainshark.com/Team-1-Group-Project-385735595.

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Page 1: "Accounting First" team project

City Racquet Club

Evaluation

Accounting First (Team 1)

Christiana Alagbe, Denisa Dobrin, Brandon LeBlanc, Adrienne Motlagh,

Horia Stoica, Donovan True

New England College of Business and Finance

MBA505 – Professor Rowe

02/03/13

Click for narrated presentation

Page 2: "Accounting First" team project

Overview

Background

Evaluation:

1. Key factors that CRC should consider in its evaluation of the new membership plan

and fee structure

2. Schedule 1 & 7: CRC’s new membership plan and fee structure improvements in cash

receipts

3. Other types of analyses we offer to perform for CRC in order for them to make a

complete evaluation of the new membership plan and fee structure

4. Explanation of how CRC’s cash management would differ from the present if the new

membership plan and fee structure were adopted

5. Strategic advantages and disadvantages to implementing this membership plan and

fee structure

Summary

References

Page 3: "Accounting First" team project

Background

Current Annual Membership

Fees

Individual $40

Student $25

Family $95

Hourly Court Fees $6 – $10

City Racquet Club

Proposed Annual Membership

Fees

Individual $250

Family $400

Page 4: "Accounting First" team project

Evaluation #1

• How does a higher up-front cost change consumer demand?

• Effect on membership level?

• Staffing levels at CRC?

• Revenues

Key Factors of Consideration

Page 5: "Accounting First" team project

Evaluation #2

CRC

Revenue Budget

For the year ending December 31st 20x1

  1st 2nd 3rd 4th Year

Individual          

Number of members 734 250 150 65 1199

Annual membership rate $200 $250 $250 $250  

Revenue $146,800 $62,500 $37,500 $16,250 $263,050

Family          

Number of members 610 126 150 65 951

Annual membership rate $300 $400 $400 $400  

Revenue $183,000 $50,400 $60,000 $26,000 $319,400

Total Revenue $329,800 $112,900 $97,500 $42,250 $582,450

Page 6: "Accounting First" team project

CRC

Cash Receipt Budget

For the year ending December 31st 20x1

  Feb-Apr May-Jul Aug-Oct Nov-Dec  

  1st 2nd 3rd 4th Year

Sales revenue (from schedule 1) $329,800 $112,900 $97,500 $42,250 $582,450

           

Collections in quarter of sale $329,800 $112,900 $97,500 $42,250 $582,450

           

Total cash receipts $329,800 $112,900 $97,500 $42,250 $582,450

Evaluation #2

Page 7: "Accounting First" team project

Analyses to make a complete evaluation of the new membership plan and fee structure

• Cost Behavior Analysis• Helps assess the impact of alternate scenarios on

profit

• Profit sensitivity analysis • A measurement of the affect of changes to

dependent variables when changes occur in the related independent variables

• Profit Multiplier Profile Analysis• Assists in measuring the impact of key changes

(price, membership levels etc.) on profit

Evaluation #3

Page 8: "Accounting First" team project

• Marginal Cost Analysis (Break-even, profits and losses)• Assessing market profitability and the potential for

competition to enter the market

• Market Share Analysis• Market share can lead to market power through lower

average costs and improve CRC’s influence in controlling the market price

• Price Elasticity Analysis• Understanding pricing elasticity for services to

maximize revenues through properly pricing services within the market

Evaluation #3

Page 9: "Accounting First" team project

• Analysis of Unequal Cash Flows• Accurately determine the future value

• Variance Analysis• Can help determine the cost of unused resources

Evaluation #3

Page 10: "Accounting First" team project

Evaluation #4

Strategic Perspective: Cash management outlook if membership plan adopted

• Cash flow for the club will change

• No additional revenue during the year

• More even distribution of funds depending on season

• A more accurate prediction of optimal cash balances in the club

Page 11: "Accounting First" team project

Advantages of implementing membership plan and fee structure

• Members will better utilize the court time without budget constrains

• The implementation will attract new members

• New plan will lead to effective cash management

Evaluation #5

Page 12: "Accounting First" team project

Disadvantages of implementing membership plan and fee structure

• Loss of revenue

• Potential loss of members

• Incurred costs can affect new membership costs

Evaluation #5

Page 13: "Accounting First" team project

Summary

• New marketing strategy

• Revision of budget

Recommendations

Page 14: "Accounting First" team project

ReferencesBoulding, W., & Staelin, R. (1993). A look on the cost side: Market share and the competitive

environment. Marketing Science (1986-1998), 12(2), 144-144. Retrieved from http://search.proquest.com/docview/207347863?accountid=33575.

Checkley, K. (2002). Strategic cash flow management. Oxford: Capstone Pub.

Coyle, B. (2000). Cash flow control. Chicago: Glenlake Pub. Co.

Dick, A. S., & Lord, K. R. (1998). The impact of membership fees on consumer attitude and choice. Psychology & Marketing (1986-1998), 15(1), 41-41. Retrieved from http://search.proquest.com/docview/230396275?accountid=33575.

Graham, I., & Harris, P. (1999). Development of a profit planning framework in an international chain: A case study. International Journal of Contemporary Hospitality Management, (11) 5, 198.

Harris, P.J. (1992), Profit Planning (Hospitality Managers Pocket Book Series). Butterworth-Heinemann, Oxford.

Hilton, R. W. (2009). Managerial Accounting: Creating Value in a Dynamic Business Environment (9th ed., pp. 458- 481). N.p.: McGrawHill.

Jazayeri, Ali, and Narjes. (2011). The Effects of Price Elasticity Dynamics on a Firm's Profit. Iranian Journal of Management Studies 4.1. 101-14. ABI/INFORM Complete; ProQuest Central. Web. 6 Nov. 2012.

Kotas, R. (1978). The ABC of PSA. Hotel, Catering and Institutional Management Association Journal. 15-19.

Kotas, R. (1986). Management Accounting for Hotel and Restaurants, 2nd ed. Surrey University Press, London.

Page 15: "Accounting First" team project

ReferencesMak, Y. T., & Roush, M. L. (1996). Managing Activity Costs with Flexible Budgeting and Variance

Analysis. Accounting Horizons, 10(3), 141-146. Retrieved from Business Source Premier.

McDaniel, L. (2010) Rethink your membership structure The Center for Association Leadership (ASAE) Retrieved from http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=51781.

Nurre, R. (n.d.). College of San Mateo. Accounting 131, Chapter 14. Retrieved from http://smccd.edu/accounts/nurre/online/chtr14.html.

Pasdo, Jerome S. (1985, January). Determining the Eventual Sale Price of an Investment. Commercial Investment Journal, 4(1), 38. Retrieved January 10, 2012, from ABI/INFORM Global. (Document ID: 1019577).

Reider, R., & Heyler, P. B. (2003). Managing cash flow: An operational focus. Hoboken, N.J: Wiley.

Shankar, V., & Bolton, R. N. (2004). An empirical analysis of determinants of retailer pricing strategy. Marketing Science, 23(1), 28-49. Retrieved from http://search.proquest.com/docview/212290230?accountid=33575.

Tsao, C. (2012). Fuzzy net present values for capital investments in an uncertain environment. Computers & Operations Research, 39(8), 1885. Retrieved January 10, 2012, from ABI/INFORM Global. (Document ID: 2549314031).

Uninterruptible Power Supply . (2011). Global market size, average pricing, market share and distribution channel analysis to 2020. (2011, Dec 12). PR Newswire. Retrieved from http://search.proquest.com/docview/910221212?accountid=33575.

Page 16: "Accounting First" team project

ReferencesYahya-Zadeh, M. (2012). Comprehensive variance analysis based on ex post optimal budget. Academy

of Accounting and Financial Studies Journal, 16, 65-85. Retrieved from http://search.proquest.com/docview/1081980068?accountid=33575.

Y, J. D. (2003, Apr 03). Flat-screen prices set to drop -makers of LCD TVs are boosting capacity in bid for market share; competition could hurt margins. Wall Street Journal. Retrieved from http://search.proquest.com/docview/308517742?accountid=33575.