Case Study- The Stratton Township Park

Question 1: Prepare an annual program budget for the Stratton Township Park including golf operations; the pool; concerts; other park activities including tours, nature visitors, and general concessions; and administrative costs. Show line-item details for each function by natural account and summarize the budget for the park as a whole.

Because of the current fiscal situation, the Stratton Township needs to reduce its operating costs. As usual, the park is on the list of targeted operations. As the finance director for the township, you have been asked to work with the park's manager to explore possible options.

Question 2: Based on the Information In the budget find the break-awn green fees for the golf course and the break-even admissions charges for the pool. You may assume that the volume of users would not change with increases in pricing. You may also assume that the course will operate for a full 130 days.

a. Do both break-even analyses based on the cost of delivering the services with and without the allocated management salaries.

b. Do you think the park can realistically charge these fees to park users? What might the consequences of raking the fees be economically, politically, and In a public relations sense?

Question 3: The park manager mints to know whether it would make sense to shut down one or more of the operations at the Stratton Township Park. Determine the impact of shutting down the golf course, the pool, the concert series, and the tours and show the overall marginal Impact of making each of these changes. Be sure to include all marginal revenues and marginal expenses in your calculations.

Question 4: After completing these analyses, the manager has decided to recommend three changes to the path's budget.
First, be plans to increase green fees for golf to $5 above the break-even price excluding allocated management costs and rounded to the next highest multiple of $.50 Since competitive private clubs in the region charge $100 or more for a round of golf he does not believe that an increase in price will result in a decline in the number of golfers using the course.

Second be wants to raise pool admission charges to $4.50. Given the demographics of those who use the pool, he believes that raising prices by $1.00 will result in a 5 percent drop in attendance.

Third, he wants to eliminate three of the concerts the township had planned for next year.

Prepare a revised budget for the Stratton Township Park reflecting these changes. Will these budget modifications meet the township's goal of reducing the subsidy it would have given to the park in the next fiscal year by 20 percent?

Question 5: After receiving your analysis of the impact of eliminating concerts, and raising green fees and pool admission charges, the path manager has asked _pm to come up with some additional proposals for meeting the township's subsidy reduction goal. What would you recommend?

Case Study- New City Band

Question 1: Prepare an operating budget for City Band for the coming fiscal year assuming the band performs on each of its 20 scheduled concert dates.

Question 2: Prepare a flexible budget showing what would happen if the band could only perform on 80 percent of its scheduled concert dates.

Question 3: Calculate City Band's total contribution margin per concert.

Lately, some of City Band's older musicians have been having difficulty climbing the stairs to get up to the bandstand. In addition, there are two disabled musicians who play at all of the band's rehearsals but are reluctant to play at the concerts because of the difficulty they have accessing the bandstand.

City Band's trustees would like to accommodate both groups of musicians. They have gotten an estimate of $10,000 to make the bandstand accessible. You have lined up a 10-year. 5500 per year grant from the State Office of Disabilities and a five-year, $750 per year grant from the Federal Office of the Ageing to help pay for the modifications to the bandstand. In addition, the local chapter of the Knights of Columbus has offered to donate $1,500 toward the project.

Question 4: If City Band's cast of capital is 6 percent, should it invest in the bandstand modifications based solely on the Knight's donation and the proceeds from the grants? Support your answer with the appropriate time value of money calculations.
City Band expected to hold 20 conceits during its last summer concert season and pay an average of 60 musicians $5 per concert for their performances. At the end of the summer, the band had only been able to perform 16 times. The other four performances were rained out. Because of the shortened concert season, the trustees decided to pay the musicians who came to the concerts $6 per performance. On average, 55 musicians were at each performance.

Question 5: Calculate City Band's total musicians' stipend expense variance for the season. Indicate whether that variance was favorable or unfavorable. Calculate the portion of that variance that was due to volume. Indicate whether that variance was favorable or unfavorable. Calculate the portion of that variance that was due to quantity. Indicate whether that variance was favorable or unfavorable. Calculate the portion of that variance that was due to the rate paid to the musicians. Indicate whether that variance was favorable or unfavorable.