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Product Type relation with Attendance endance

Product Type relation with Attendance endance

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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event profit

Input Analysis 100 Model Inputs Product Type Programs Food Merchandise # of Events Cost of Goods Sold (COGS) 40% 60% 70% You are the owner of a small business that manages the program, food, and Commission Fixed Costs 20% 10% 5% Statistic Attendance Programs Food Merchandise merchandise sales at the Excel Center, where the local professional basketball team $10,000.00 0.20% $5,000.00 $20,000.00 plays. In addition to basketball games, the Excel Center hosts dozens of events a Average Standard Deviation 95% Confidence Interval Employees (% of Expected Profit) 0.05% 0.03% year. Your company handles all sales made inside the arena. There are three major $50.00 $100,000.00 Salary (per employee) products you sell: programs, food, and merchandise. You have decided to build a Arena Fee spreadsheet model to help you analyze and project the profitability of future events. Product Type Programs Food Merchandise The "Event Profit" worksheet contains this model. You have randomly selected Event Profitability Analysis Correlation with Attendance sales and attendance data from a number of past events to help build your model. This data can be found on the "Past Events" worksheet. You will analyze this data in order to obtain appropriate values to develop the model. Complete the tasks to finish the model. Whenever possible, reference cells rather than hard-coding values in the cells of your worksheet. Gross Profit Attendance 18000 Product Type Programs Food Merchandise Sales Product Type Programs Food Merchandise Cost of Goods Sold (COGS) Sales Forecast Gross Profit Upper Limit for Sales Lower Limit for Sales Operating Expenses Product Type Programs Food Merchandise What-if Analysis Salary Expenses Attendance Forecast Commissions 15000 18000 21000 Fixed Costs Total Operating Expenses $50,000.00 $75,000.00 $100,000.00 $125,000.00 $150,000.00 $175,000.00 Profit before Arena Fee Number of Employees $200,000.00 Profit Summary Product Type Total Questions Sales Gross Profit Question 1: The sales for which product type are most highly correlated with attendance? Total Operating Expenses Profit before Arena Fee Arena Fee Question 2: How likely is it that food sales would exceed $220,000 if attendance is 18000? Net Profit Question 3: Which product generates the largest gross profit? Question 4: Which product will require the fewest employees? Question 5: Would the event be profitable with a 150,000 arena fee if 15000 people were in attendance?
Transcribed Image Text:Input Analysis 100 Model Inputs Product Type Programs Food Merchandise # of Events Cost of Goods Sold (COGS) 40% 60% 70% You are the owner of a small business that manages the program, food, and Commission Fixed Costs 20% 10% 5% Statistic Attendance Programs Food Merchandise merchandise sales at the Excel Center, where the local professional basketball team $10,000.00 0.20% $5,000.00 $20,000.00 plays. In addition to basketball games, the Excel Center hosts dozens of events a Average Standard Deviation 95% Confidence Interval Employees (% of Expected Profit) 0.05% 0.03% year. Your company handles all sales made inside the arena. There are three major $50.00 $100,000.00 Salary (per employee) products you sell: programs, food, and merchandise. You have decided to build a Arena Fee spreadsheet model to help you analyze and project the profitability of future events. Product Type Programs Food Merchandise The "Event Profit" worksheet contains this model. You have randomly selected Event Profitability Analysis Correlation with Attendance sales and attendance data from a number of past events to help build your model. This data can be found on the "Past Events" worksheet. You will analyze this data in order to obtain appropriate values to develop the model. Complete the tasks to finish the model. Whenever possible, reference cells rather than hard-coding values in the cells of your worksheet. Gross Profit Attendance 18000 Product Type Programs Food Merchandise Sales Product Type Programs Food Merchandise Cost of Goods Sold (COGS) Sales Forecast Gross Profit Upper Limit for Sales Lower Limit for Sales Operating Expenses Product Type Programs Food Merchandise What-if Analysis Salary Expenses Attendance Forecast Commissions 15000 18000 21000 Fixed Costs Total Operating Expenses $50,000.00 $75,000.00 $100,000.00 $125,000.00 $150,000.00 $175,000.00 Profit before Arena Fee Number of Employees $200,000.00 Profit Summary Product Type Total Questions Sales Gross Profit Question 1: The sales for which product type are most highly correlated with attendance? Total Operating Expenses Profit before Arena Fee Arena Fee Question 2: How likely is it that food sales would exceed $220,000 if attendance is 18000? Net Profit Question 3: Which product generates the largest gross profit? Question 4: Which product will require the fewest employees? Question 5: Would the event be profitable with a 150,000 arena fee if 15000 people were in attendance?
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