Spinnaker Museum of Sailing (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of both current sailing exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like many museums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on-site. The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visits from the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on. The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July 1. SMS expects 250,000 visitors in the next fiscal year. Labor (variable) $ 2,375,000Miscellaneous (variable) 1,300,000Supervision (fixed) 630,000Miscellaneous (fixed) 630,000 The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum. The museum director has received a proposal from Gitre Operations to provide staff and some other services for the Visitor Division. Gitre has proposed a fee of $16 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor cost and 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40 percent of the miscellaneous fixed costs. Spinnaker Museum of Sailing (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of bothcurrent sailing exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like manymuseums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on-site.The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visitsfrom the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on.The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July1. SMS expects 250,000 visitors in the next fiscal year.Labor (variable)Miscellaneous (variable)Miscellaneous (fixed)Supervision (fixed)$ 2,375,0001,300,000630,000630,000The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum.The museum director has received a proposal from Gitre Operations to provide staff and some other services for the VisitorDivision. Gitre has proposed a fee of $16 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor costand 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40percent of the miscellaneous fixed costs.

Financial Analysis: SMS Visitor DivisionCurrent SituationExpected visitors: 250,000 Costs:Labor…

Spinnaker Museum of Sailing (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of both current sailing exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like many museums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on-site. The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visits from the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on. The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July 1. SMS expects 250,000 visitors in the next fiscal year. Labor (variable) Miscellaneous (variable) Miscellaneous (fixed) Supervision (fixed) $ 2,375,000 1,300,000 630,000 630,000 The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum. The museum director has received a proposal from Gitre Operations to provide staff and some other services for the Visitor Division. Gitre has proposed a fee of $16 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor cost and 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40 percent of the miscellaneous fixed costs.

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter4: The Revenue Cycle

Section: Chapter Questions

Problem 6ICC

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Spinnaker Museum of Sailing (SMS) is a popular tourist site in a coastal town. The museum boasts a large collection of both current sailing exhibits and historical displays focused on ocean exploration and maritime adventures. SMS, like many museums, is a not-for-profit organization, but it charges for admission and operates a highly-rated book shop on-site. The museum has several operating divisions. One of them, the Visitor Division, is responsible for activities related to visits from the public, such as collecting admission fees, providing coat and bag check service, operating the book store, and so on. The museum's financial director has provided the forecasted cost of the Visitor Division for the upcoming year, beginning July 1. SMS expects 250,000 visitors in the next fiscal year. Labor (variable) $ 2,375,000 Miscellaneous (variable) 1,300,000 Supervision (fixed) 630,000 Miscellaneous (fixed) 630,000 The average admission fee is $30 per visitor and the average visitor spends 2.5 hours in the museum. The museum director has received a proposal from Gitre Operations to provide staff and some other services for the Visitor Division. Gitre has proposed a fee of $16 per visitor. If SMS accepts the proposal from Gitre, SMS would avoid all labor cost and 60 percent of the variable miscellaneous costs. The museum would also save 70 percent of the supervision costs and 40 percent of the miscellaneous fixed costs.

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