"accounting first" team project

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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.


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

2. OverviewBackgroundEvaluation:1. Key factors that CRC should consider in its evaluation of the new membership plan and fee structure2. Schedule 1 & 7: CRCs new membership plan and fee structure improvements in cash receipts3. Other types of analyses we offer to perform for CRC in order for them to make a completeevaluation of the new membership plan and fee structure4. Explanation of how CRCs cash management would differ from the present if the new membershipplan and fee structure were adopted5. Strategic advantages and disadvantages to implementing this membership plan and fee structureSummaryReferences 3. BackgroundCity Racquet ClubCurrent Annual Membership FeesProposed Annual Membership Fees Individual $40Individual $250 Student$25Family$400 Family $95Hourly Court Fees $6 $10 4. Evaluation #1 Key Factors of Consideration How does a higher up-front cost change consumer demand? Effect on membership level? Staffing levels at CRC? Revenues 5. Evaluation #2 CRCRevenue Budget For the year ending December 31st 20x11st2nd 3rd 4thYearIndividualNumber of members734 250 150 65 1199Annual membership rate$200 $250$250$250Revenue $146,800$62,500$37,500 $16,250 $263,050FamilyNumber of members610 126 150 65951Annual membership rate$300 $400$400$400Revenue $183,000$50,400$60,000 $26,000 $319,400Total Revenue $329,800 $112,900$97,500 $42,250$582,450 6. Evaluation #2CRC Cash Receipt BudgetFor the year ending December 31st 20x1Feb-Apr May-JulAug-Oct Nov-Dec1st 2nd3rd 4th YearSales revenue (from schedule 1)$329,800 $112,900 $97,500 $42,250 $582,450Collections in quarter of sale $329,800 $112,900 $97,500 $42,250 $582,450Total cash receipts$329,800 $112,900 $97,500 $42,250 $582,450 7. Evaluation #3Analyses 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 dependentvariables when changes occur in the related independentvariables Profit Multiplier Profile Analysis Assists in measuring the impact of key changes(price, membership levels etc.) on profit 8. Evaluation #3 Marginal Cost Analysis (Break-even, profits and losses) Assessing market profitability and the potential for competitionto enter the market Market Share Analysis Market share can lead to market power through lower averagecosts and improve CRCs influence in controlling the marketprice Price Elasticity Analysis Understanding pricing elasticity for services to maximize revenues through properly pricing services within the market 9. Evaluation #3 Analysis of Unequal Cash Flows Accurately determine the future value Variance Analysis Can help determine the cost of unused resources 10. Evaluation #4Strategic Perspective: Cash management outlook if membership plan adoptedCash flow for the club will changeNo additional revenue during the yearMore even distribution of funds depending on seasonA more accurate prediction of optimal cash balances in the club 11. Evaluation #5 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 12. Evaluation #5Disadvantages of implementing membership plan and fee structure Loss of revenue Potential loss of members Incurred costs can affect new membership costs 13. Summary Recommendations New marketing strategy Revision of budget 14. ReferencesBoulding, W., & Staelin, R. (1993). A look on the cost side: Market share and the competitive environment. MarketingScience (1986-1998), 12(2), 144-144. Retrieved fromhttp://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 Firms 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. 15. ReferencesMak, Y. T., & Roush, M. L. (1996). Managing Activity Costs with Flexible Budgeting and Variance Analysis. AccountingHorizons, 10(3), 141-146. Retrieved from Business Source Premier.McDaniel, L. (2010) Rethink your membership structure The Center for Association Leadership (ASAE) Retrievedfrom http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=51781.Nurre, R. (n.d.). College of San Mateo. Accounting 131, Chapter 14. Retrieved fromhttp://smccd.edu/accounts/nurre/online/chtr14.html.Pasdo, Jerome S. (1985, January). Determining the Eventual Sale Price of an Investment. Commercial InvestmentJournal, 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. MarketingScience, 23(1), 28-49. Retrieved fromhttp://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 channelanalysis to 2020. (2011, Dec 12). PR Newswire. Retrieved fromhttp://search.proquest.com/docview/910221212?accountid=33575. 16. ReferencesYahya-Zadeh, M. (2012). Comprehensive variance analysis based on ex post optimal budget. Academy of Accountingand Financial Studies Journal, 16, 65-85. Retrieved fromhttp://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 marketshare; competition could hurt margins. Wall Street Journal. Retrieved fromhttp://search.proquest.com/docview/308517742?accountid=33575.