Question

scenario

Shelley Jones has just been elected as president of the circular club of Auburn, Kansas, and she has been asked to suggest a new fundraising activity for the club. After a considerable amount of research, Shelley proposed the circular club sponsor s professional rodeo. In ger presentation to the club, Shelley recommends the fundraiser becomes an annual activity with the following goals:
1. continue to grow each year
2. give back to the community
3. provide the club a presence in the community

Shelley's goals in the first year is to have an activity that would become an annual community event, and would reskin even the first fiscal year and raise $5000 the following year. In addition, based on the experience of other communities Shelley believed a rodeocould grow in popularity so the club would eventually earn an average of $20000 annually.
A rodeo committee was formed. Shelley contacted the world's oldest and largest rodeo sanctioning agency to apply to sponsor a professional rodeo. The sanctioning agency requires a rodeo consist of the following five events: Bareback riding, bronco riding, steer wrestling, bull riding, and calf roping, Team roping, and women's barrels. Prize money in the amount of $3000 would be paid to the winners in each of the 7 events. Members of the rodeo committee contracted with RJ cattle company, a livestock contractor of the rodeo circuit, to provide bucking stock, fencing, and chutes. Realizing cost associated with the rodeo were tremendous and ticket sales would probably not be sufficient to cover the costs, the rodeo committee sent letters to local businesses soliciting contributions in exchange for various sponsorships. Exhibiting sponsorships are $1000 to exhibit products or services while major sponsorships are $600, and chute sponsorships are $500 to have the name of the sponsors business on one of the 6 bucking chutes. For a contribution of $100 individual sponsors be included in a friends of rodeo list found in the rodeo programs.

A local youth group will be contacted to provide concessions to the public and divide the profits with the circular club. The Auburn circular club pro rodeo roundup will be held on June 1, 2, and 3. The cost of an adult ticket is set at $8 in advance or $10 at the gate; the cost of a ticket for a child 12 or younger is set for $6 in advance or $8 at the gate. Tickets are not for a specific date. Rather one ticket will admit an individual to one performance of his or her choice--friday, Saturday, or Sunday. The rodeo committee is able to secure a location through the county supervisors board at a nominal cost to the circular club. The arrangements allow for the use of the county fairgrounds and the arena for a one-week period. Several months prior to the rodeo members of the rodeo committee were notified the bleachers at the arena would hold 2500 patrons. On Saturday nigh, paid attendance was 1663, but all seats were filled due to poor gate controls. Attendance was 898 Friday, and 769 on Sunday. The following revenue and expense figures relate to the first year of the rodeo.

Receipts
contributions from sponsors.   $22000
receipts from ticket sales.         $28971
share of concession profits.      $1513
sale of programs.                        $600
total receipts.                               $53084

Expenses
livestock contractor.                    $26000
prize money.                                  $21000
contestant hospitality.                  $3341*
sponsor signs of arena.                $1900
insurance.                                       $1800
ticket printing.                                $1050
sanctioning fees.                            $925
entertainment.                                 $859
judging fees.                                     $750
port-a-potties.                                   $716
rent.                                                    $600
hay for horses.                                  $538
programs.                                           $500
western hats to first 500 children.    $450
hotel rooms for stock contractor.     $325
utilities.                                                 $300
sand for arena.                                     $251
misc. fixed costs.                                  $105
total expenses.                                      $61410
net loss.                                                  $(8326)

*The club contracted with a local caterer to provide a tent and food for the contestants. The cost of the food was contingent on the number of contestants each evening. Information concerning the number of contestants and the costs incurred are as follows:

                 Contestants.         total costs

Friday.            68.                         $998
Saturday.        96.                         $1243
Sunday.           83.                         $1100

                                                      $3341

On Wednesday after the rodeo, the members of the rodeo committee met to discuss and critique rh rodeo. Johnathon Edmunds CPA and the president of rh circular club commented that the club did not lose money. Rather, Jonathan said, the club made an investment in the rodeo. Th rodeo committee was requested an analysis of the rodeo performance and evaluation of the CPA's review.

create a slide and answer the following:

Assume you are elected chair of the rodeo committee for next year, what steps would you suggest the committee take to make the rodeo profitable.

Answer 1

1)
Yes, it was necessary for shelly jones to set goals.
Shelley proposal that the Circular Club sponsor a professional Rodeo may not make a profit in the first year but may produce a profit in the future by successfully using management accounting techniques such as planning, controlling and monitoring activities.
The non-profit organization has a goal to give back to the community in a variety of ways making donations to worthy causes , volunteering etc.The Circular Club of Auburn wants to give back tothe community by providing annual community event as an entertainment to the public and the funds raised by the event will used for worthy causes .
By sponsoring a professional rodeo the Circular club will get exposure through public radio announcements, fliers, and advertising posters throughout the community.
2)
Johnathan Edmunds meant to say its a investment of time, effort and monetary resources and professional rodeo sponsorship will help the club in achieving goals and objectives.
3)
	Contestants	Total Cost
Friday	68	$998.00	Low
Saturday	96	$1,243.00	High
Sunday	83	$1,100.00
Total Cost		$3,341.00
Step 1		Contestants	Total Cost
High Day	Saturday	96	$1,243
Low Day	Friday	68	$998
Difference		28	$245
Step - 2 Variable cost per contestant = $245/28	$8.75
Fixed Cost
Saturday = $1243 - (96 x $8.75)	$403
Friday = $998 - (68 x $8.75)	$403
Step -3 Fixed Cost per contestant	$403
Step 5 = Total variable cost = No. of contestant x $8.75 Contestants Fixed cost Variablecost Total Cost Friday 68 $403.00 $595.00 $998.00 Saturday 96 $403.00 $840 $1,243