Mrc1023 Auburn Circular Club

Topics: Costs, Variable cost, Cost Pages: 4 (650 words) Published: October 21, 2011

Group Assignment – Case 5

1. Yes, it was necessary for Shelley Jones to stipulate that she wanted a fund-raiser. Reasons:

1. Become the target / KPI for the fund raised.
2. Auburn Circular Club will be recognised by the community. 3. Contribution for the community.
4. Sense of responsibility for fund-raiser.
5. Ensure continuity of the rodeo event for future year with sufficient fund.

2. What Jonathan Edmunds meant was lost in the year event of $8,326 would contribute as amount invested to build the image of Auburn Circular Club.

3. Yes, Jonathan’s comment is consistent with Shelley’s idea that the club should have a fund-raiser because it was the first year event and hoping that it will get better next year.

4. The rodeo expenditures showed that the expenses were three times more than collection on ticket sales.

5. Variable Cost of the catering cost using high-low method is $8.75 per contestant and the fixed cost is $403 as shown in the calculations below: Variable Cost
i) Total Cost
i. = $1243 - $998 = $245

ii) Contestants
ii. =96 – 68 = 28

iii) Variable Cost per contestant
iii. =245/28 = $8.75

Fixed Cost

| High| Low|
Total Cost| $1243| $998|
Less Variable Cost| = 99 x 8.75=$840| = 68 x 8.75= $595| Fixed Cost| $403| $403|

6. The committee should take the following steps to make the rodeo profitable :

i. Review the expenses incurred in previous year rodeo event to avoid unnecessary expenses. ii. Look for quotation from other life stock contractor to get the cheaper price. iii. Ticket must be dated to avoid re-used of ticket by other individual.

7. Break-even point in dollars of ticket sales

Contribution Margin = Gross sales- variable Costs
100% - 4% = 96%
BEP in dollar = Fixed cost =...
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