GROUP ASSIGNMENT

SUBJECT: MANAGERIAL ACCOUNTING

ABC Ltd. Inc is a brand-new sport organization. Because it is still very young, the company does
not have a solid management accounting system to provide information for the decision making
of senior management. The main business that ABC operates is organizing football matches as
well as indoor and outdoor sports events. Let's say that you are hired to work as an accounting
assistant for the chief accountant of ABC and you are assigned some tasks as follows:
You have been provided with two different resources to help you complete this exercise. Use
ONE of the two resources:
1. An instruction MS Word format
2. A worksheet in MS Excel format. Access the link below to download and finish the
assignment:
https://docs.google.com/spreadsheets/d/1I1DkzGg2FHVI5HM7xNXFgtUoiUzz_DeO/edit?
usp=sharing&ouid=114655148697128018858&rtpof=true&sd=true
Task number 1: Cost Classification
ABC is organizing a football festival in the city. Your task is to match the typical expenditures in
Table A with the scenarios in Table B.
Table A - Typical Expenditures
Group A Group B
Repairs and Maintenance Trophies Balls,
Electricity Flags and Whistles
Canteen Supplies Referee Fees
Cleaning Shade Tents
Group C Group D
Printing of Art Union Tickets Payments to coaches
Cost of Notice in Newspaper of Art Union Hire of courts
Results Art Union Prizes Coaching manuals
Group E Group F
Computer Expenses Water Usage
Telephone and Postage Fertiliser and Grass Seed
Paper and Printing Mowing and Line Marking
Group G Group H
Airfares Supplies for Barbecue
Accommodation and food Hire of Jumping Castles for Children
Team Apparel Giveaway T-Shirts and Caps

Table B – Scenarios
Scenarios Put the Letter of the appropriate group in
this column
1. Come n’ try promotional event
2. Junior football carnival
3. Fundraising campaign
4. General administration of the organisation
5. Running costs of the clubhouse
6. Indoor basketball clinic for coaches
7. Facility maintenance costs (outdoor)
8. Taking a team to a national championship
Task number 2: Estimating Income and Expenditure
Using the information in Table A, your task is to estimate the items of income or expenditure
shown in column 1 of Table B and put your answer in column 4 of Table B.
You should also write in column 2 of Table B whether the item is an income or expenditure item.
Furthermore, you should also write in column 3 of Table C the letter of the factor group that you
used to calculate your answer.
In making calculations, you are advised that none of the information in Table A is redundant.
Table A – Typical Expenditures
Factors Group A Factors Group B (note 1)
The number of opening hours per week: 12 Width of advert: 2 columns
The average sales per hour: $100 Number of lines: 10
Number of weeks open per season: 30 Cost per line (per single column): $8.00
Number of adverts: 4
Factors Group C Factors Group D
Wage rate per hour: $30.00 Number of members: 500
Number of hours worked per week: 25 Fee per member: $150
Weeks per year: 30
Factors Group E (note 2) Factors Group F
Watts per globe: 500W Game fee per player: $6
Number of globes: 60 Total matches per week (all teams): 30
Hours of use: 18 hrs per week Av. Number of players in a team: 14
Number of weeks in the season: 30 Number of weeks in the season: 30
Cost per kilowatt hour: $0.20
Factors Group G (note 3) Factors Group H
Hours to mow whole of fields: 8 Cost per shirt: $20
Number of mows per week: 1 Cost per shorts: $15
Wage rate per hour: $25 Cost per socks (pair): $6
Fuel cost per hour: $4 Number of players: 300
No of weeks mowed once per week: 26
No of weeks mowed twice per week: 26
Notes:
1. Newspaper advertising is often charged according to how many columns wide it is by how
many lines (of text) down the page (length).
2. 1 Kilowatt = 1000 watts (therefore a 500watt globe is a half kilowatt globe). Electricity is
charged according to how many kilowatt hours is used (i.e., the number of kilowatts multiplied
by the number of hours)
3. Grass grows differently in summer and winter. In summer pitches need to be mowed twice per
week, whereas in winter once per week is adequate.
Table B – Scenarios
 COLUMN 1 COLUMN 2 COLUMN 3 COLUMN 4
Item Income or Factor Show your answer and workings in
Expenditure Group this column
1. Canteen Sales
2. Newspaper Advertising
3. Bar Attendant
4. Membership Fees
5. Cost of Floodlights
6. Game Fees
7. Pitch Mowing
8. Team Apparel Cost
Task number 3: Break- Even Analysis
You are provided the spreadsheet in which are six Break-Event point problems which increase in
degree of difficulty from Case A to Case F.
In each spreadsheet you will need to put in formulae to work out income, and then formulae to
work out costs. You should remember that the number of spectators/participants is a very
important element in working out the total income and the amount of variable costs.
Once you have set out the spreadsheet, find your solution by manipulating the number of
spectators/participants. Be aware that the model presented overleaf needs to be adjusted in design
and content for each problem. The main purpose of the example is mostly to demonstrate that
you will need an income and an expenditure section.
Case A – Basic break-even point problem
In this simple problem your task is to work out the number of participants required to ensure
the
event breaks-even.
The data you need to make your calculation is as follows:
• Total Fixed Costs: $10,080
• Variable Cost per Participant: $2.00
• Ticket Price per Participant: $20
Case B – Variation of the basic break-even point problem
This problem is much the same problem as in case A except that you are given the number of
participants and you must work out what is the minimum price that spectators must be
charged.

The data you need to make your calculation is as follows:

• Total Fixed Costs: $10,000
• Variable Cost per Participant: $5.00
• Number of Participants Required: 500
Case C – Awards evening
The club committee are putting on an awards evening in the clubhouse. The ticket price will
be $30 per person, and it is expected that 100 people will attend.
The committee will spend $1500 on entertainment and prizes.
What is the maximum cost of the meal per person that can be afforded, if the event is not to
make a loss?
Case D – Calculating the break-even point of three possible venues for an event
The committee of a sport organization is considering three different venues to stage a major
fundraising event. Venue A has a maximum seating capacity of 500 people and costs $1,200 to
hire.
Venue B has a maximum capacity of 1000 and costs $3,500 and Venue C has a maximum
capacity of 2000 and costs $9,000.
If the variable cost for each participant is $5.20, which venue would be the most profitable at
maximum capacity?
To solve this problem, you will need three separate spreadsheets, one for each venue.
Case E – Two levels of ticket prices make the break-even point a little more difficult
In this problem there are two levels of spectator admission price – adults $20 and children $5.
This makes the break-even calculation problem a little more difficult. However, it is expected
that the ratio of adults to children is 2:1 (two adults to every one child). Knowing this ratio
will enable you to calculate the break-even point required for adults and children required.
Other important information includes:
• Total Fixed Costs: $20,000
• Variable Cost per Participant: $2.00
• Ticket Price for accompanied children: $5
• Ticket Price for adults: $20
• Expected Ratio: 2 Adults to every 1 child
Case F – Two different break-even points dependent on the number of event spectators
In this problem, there are TWO break-even points. This scenario is commonplace in major
events such as Football matches. The two break-even points occur because there are two
possible levels of fixed expenditure depending on whether the spectator crowd is smaller or
greater than 20,000. If the crowd exceeds 20,000, the stadium manager has to open up the
second tier of seating and extra staffing and cleaning will result.
The important data is as follows:
All spectators will be charged $15 each for entry to the stadium.
Fixed Costs if the total number of spectators is 20,000 or less will be $200,000. But if
spectators are more
than 20,000, fixed costs will immediately rise to $300,000.
Irrespective of the number of spectators, the variable cost per participant: $3.00
Task number 4: Gross Profit Scenarios
Here are three budgeting problems that introduce Gross Profit as an important factor in setting
budgets where Sales of Products are involved.
As with all budgeting problems, utilize a spreadsheet wherever possible to set out your workings
and perform your calculations.
Case A – Simple Gross Profit calculation – No inventory (stock) involved
ABC purchases the following items of clothing to resell to its members:
• Shirts – quantity 200, costing $20 each, selling price $30 each
• Shorts – quantity 200, costing $15 each, selling price $20 each
• Socks – quantity 200 (pairs), costing $6 each, selling price $10 each
All items of clothing were sold.
Your task is to calculate the Gross Profit in dollars and percentage terms for each of the three
lines of clothing.
What is the overall Gross Profit in dollar and percent terms, and which line of clothing was the
most profitable?

Case B – Gross Profit calculation with changes of inventory(stock) involved

ABC runs a bar in its clubhouse. During the Table 1
month of June, the accounts show that Category Purchases Sales
purchases and sales for the four categories of Beer 6,000 10,000
products that are sold from the bar were as in Wine 4,500 8,000
Table 1. Spirits 2,000 3,500
Table 2 Other 800 900
Opening Closing A stock take was taken at beginning and
Stock 01-Jun Stock 30-Jun end of June and the stock levels as shown
Category $ $ in Table 2.
Beer 500 800 Your task is to prepare a spreadsheet that
Wine 1,000 1,200 calculates the Gross Profit for each category
Spirits 750 900 in dollar and percent terms, and the same for
Other 250 500 overall Gross Profit of the bar for the month
Total 2,500 3,400 of June.
Case C – Increasing profit from the clubhouse bar
ABC runs a bar in its clubhouse which is open for business for 3 hours in the evening on
Friday, Saturday, and Sunday (a total of 9 hours per week). The number of sales per hour is
generally $500 per hour except on Saturday evening when sales rise to $600 per hour.
Over the last one year, according to financial accounting records, the Gross Profit on bar sales
is generally 36%. Keeping the bar open requires one bartender paid at the rate of $25.00 per
hour and it is also estimated that electricity costs $5.00 per hour.
The management committee wants to make more profit from the bar and is trying to decide
between two options.
Option 1: Open one more hour on Saturday evening on the basis that the extra hour achieves
the
same sales per hour as other hours on Saturday ($600/hr). There would be no attempt to
change bar prices to increase Gross Profit.
Option 2: Keep the same opening hours for the three evenings but increase prices a small
amount to achieve a Gross Profit of 40%.
Prepare three spreadsheets that show the gross profit and net profit in the bar for (a) the
existing scenario (b) the extra hour on Saturday scenario and (c) the increase in Gross Profit
percentage from 36% to 40%.
Task number 5: Simple Event Budget
You are planning a one-day conference and you hope to make $1,000 profit out of it.

The expected number of people attending is 100. The conference program will have four (4)
speakers, and each will be paid $150 for their services on the day.
The venue is a hotel function room, and it will cost $1,000 for the day.
Other expected costs include:
Advertising $1,000, photocopying, and printing $500, flowers and shrubs $200, table linen $100,
giveaway stationery $200, and food and refreshments for all the participants at $10 per head.
What you must find out!
How much registration fees will you need to charge each conference participant to make the
target $1,000 profit if you have 100 registrations?
Task number 6: Event Budget
Your task is to create a budget for a four-day weightlifting tournament. This exercise will assist
the learner to understand how to set out a financial statement that shows anticipated income and
expenditure for a project such as an event.
Your Scenario
The ABC Company (ABC) has been invited to bid for a four-day international weightlifting
tournament. The event will take place in six months’ time.
Although it would seem a welcome boost to the organization to run this tournament, the ABC
committee are concerned as to whether the event can be run profitably. The last time this event
was run in Australia, the Western Australian Weightlifting Association hosted it and they made a
loss of $20,000.
The ABC committee has asked you to investigate probable income and expenditure and prepare
a budget for next week's committee meeting.
After some initial investigations you have come up with the following information.
Venue Costs
The Theatre of the Sleeman Sports Complex is available for the dates of this event. It is a great
venue as it was used for the Commonwealth Games in 1982. The venue will cost a $75 per hour
and it is expected that the event will start at 12:00 noon and finish at 8:00pm on each of the four
days. Therefore, is a need to hire the venue for 8 hours per day.
The venue has excellent sound and lighting systems and therefore there is no need to bring in
extra equipment. However, the venue manager does not allow users to have access to the
sound/lighting control room. Instead, there is a requirement to pay for a sound/lighting system
operator who will be hired by the venue manager. The cost of the sound/lighting system operator
is $40 per hour.
The venue has a maximum capacity of 3,000 people.
Equipment Costs
Although the association has plenty of weightlifting equipment, the ABC committee thinks it
appropriate to purchase a new bar and weights for the competition platform. A quote has been
received from the supplier as follows:
Item Required Qty Required Price Each
• 20Kg Bar and Collars 1 $1,250.00
• 25Kg Disc, Rubber 2 $250
• 20Kg Disc, Rubber 2 $200
• 15Kg Disc, Rubber 2 $170
• 10Kg Disc, Rubber 2 $150
• 5Kg Disc, Kevlar 2 $150
• 2.5Kg Disc, Kevlar 2 $140
• 1Kg Disc, Metal 2 $25
• .5Kg Disc, Metal 2 $15
Accommodation for Referees
There is no actual payment for referees, but it is generally the practice that referees who have
travelled interstate have fully paid accommodation provided. The number of such referees
requiring such accommodation is six (6) and the average accommodation cost is expected to be
$120 per night. Accommodation for these six referees needs to be provided the night before the
event starts and each night after there has been a day of competition.
Program Printing
The official tournament program is expected to have eight (8) A4 pages, full color both sides,
folder and stapled in the middle to make a booklet of sixteen (16) A5 pages.
It has been agreed that should arrange for 1,000 programs to be made. This will require 8,000
pages to be printed.
You have received a quote from the printer that, for quantities of 1,000 sheets, one sheet full
color both sides will cost $0.40. There is an additional cost of $50 for stapling and folding and
making 1,000 booklets.
You will be able to reduce the cost of this program printing by charging spectators $5 per
program.
Trophies
A very large number of trophies will be needed.
The tournament will have a total of eight bodyweight divisions, that is eight (8) for men and
seven (7) for women. There will be a need to present a 1st, 2nd and 3rd place trophy in each of
these 15 bodyweight divisions. It has been agreed that you have $100 to spend on trophies for
each bodyweight division, and that this will be apportioned as follows:
• 1st place $50
• 2nd place $30
• 3rd place $20
Functions
There will be two functions, one to open the event on the first day and one immediately after the
event on the last day. The first function is an Official Opening Function for dignitaries only. The
second event is a "Dinner" for all competitors, officials, and volunteers. A catering company has
been contracted for both events and has provided the following details of costs:
Opening function: The expected number of officials, sponsors and dignitaries will be 50 persons.
The catering company will provide finger food and beverages at a price of $15 per head.
Closing function: The expected number of people will be 300 at a cost of $20 each. There will
also be some entertainment at a cost of $500 for the night.
Advertising
You will need to advertise the event in the regional newspaper at a cost of $500, and purchase
some 10 radio adverts of 30 second duration costing $3,000 in total.
Ticket Sales
The normal cost of a spectator ticket to the four-day international weightlifting tournament is $10
per day.
It is estimated that you will achieve the following spectator numbers:
Day 1 - 400
Day 2 - 400
Day 3 - 600
Day 4 - 1,000
Now that you have details of costs and income, you should draft a budget and determine whether
or not it is advisable to go ahead with a bid for this event.
Task number 7: Create a simple program budget.
Instructions
Using the data given below, create a spreadsheet that will work out what each participant must
be charged, so that the program will make a $2,000 profit on the basis that the maximum number
of participants is achieved.
For this exercise, you are not provided with a ready-to-go Excel file. You must prepare the
spreadsheet yourself, however a suggested layout for your spreadsheet is given below.
Your Scenario Data
ABC is planning to put on a ten-week program to introduce kids into drama. The maximum
number of participants is 20.
A hall has been booked in the town's cultural center for two hours each Wednesday evening for
$30 per hour.
A qualified teacher has been hired for the program who will cost $45 per hour.
ABC has a sound system of its own but there is likely to be a need to purchase music costing
$30.
The program will be advertised in the local newspaper over a three-week period at a total cost of
$390.
There will be photocopying costs of $80.
How much should ABC charge each participant for the ten-week program if ABC wants to make
a $2,000 profit.
Produce a one-page summary that sets out all costs and shows how the participant’s fees are
calculated. Ensure your document has a professional appearance and has appropriate headers and
footers.
 Task number 8: Employment Budgets
In this exercise provides you are provided with ready-to-go formatted spreadsheets and
instructions on how to complete. This exercise introduces several terms associated with
employment and the remuneration of workers. Using the provided spreadsheet, your task is to
find the total cost of employment of five positions in scenario A and the five positions in
scenario B below.
Scenario A – Salaries
Calculation of Superannuation and Total Employment Cost
Positions Annual Employer's Total
Salary Superannuation Employment
Contribution Cost
$ % $ $
Chief Executive Full-Time 40,000 24%
Senior Team Coach Part-Time 26,000 24%
Participation Development Officer Full-Time 35,000 24%
Junior Coaching Director Part-Time 20,000 24%
Administration Assistant Full-Time 21,000 24%
Total Employment Budget 142,000

Please turn over for Scenario B - Wages

Scenario B – Wages
Calculation of Superannuation and Total Employment Costs
Positions Rate / hr Hrs / Weeks / Gross Employer's Total
Week Year Wages Superannuation Employmen
Contribution t
Cost
$ % $ % $ $
A B C D E F G H I
Grounds Caretaker Part-Time 25.00 20.00 52 24%
Senior Bartender Part-Time 26.00 20.00 52 24%
Bartender Casual 21.00 10.00 26 24%
Canteen Salesperson Casual 18.00 10.00 30 24%
Administration Assistant Part-Time 23.00 15.00 52 24%
Total Employment Budget
Task number 9: Cashflow Budgeting
Your task
As a manager of ABC company, you are required to complete a cash flow forecast using the
template provided.
Your cash flow forecast will predict the bank balance at the end of each month for every month
of the year.
The information you have at your disposal to complete this task is as follows:
A. The event management company has on its books four (4) major events to run which will take
place in March, May, August, and October.
B. The total of $285,000 of ticket sales will be earned in the months that the events are held. The
March event will earn $65,000, and the other events in May, August and October will earn
$70,000, 85,000 and $65,000 respectively.
C. Expenditure on casual salaries, travel and transport, and venue hire will occur only in the
months in which the four events take place. These expenditures will be the same for each event.
D. Salaries and Office and administration expenses will occur evenly every month.
E. The company's opening bank balance on 1 January is $5,000
F. The company will receive a government grant of $50,000 in July.
G. The company will make a small income from Merchandising during the months in which the
four events are staged. The event in March will earn $1,300 merchandising income, and the other
events in May, August and October will earn $1,600, $1,800 and $1,300 respectively.
Cashflow Forecast Template
Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Opening Balance 5,000 5,000

Income
Ticket Sales
Merchandising
Government Grant

Total

Expenditure
Task number 10: Evaluating Capital Expenditure Proposals
Your Task
In this exercise, your task is to work out the costs and benefits of two competing business capital
expenditure proposals and determine which proposal would lead to better business performance.
The term capital expenditure means that the expenditure goes on assets and will have a lasting
value on producing income for the business.
The task of working out which proposal is best has been made easier for you as a template is
provided. The template will show you one way to set out the problem so that it is easy to read
and understand.
Your Scenario
ABC tennis center in southern Tasmania has four grass courts. The management committee is
considering two proposals for improving facilities. Both proposals will have some benefit on the
long-term revenue of the club.
Proposal A
The four grass courts will be resurfaced as hard courts. This is estimated to increase court usage
by 800 court hours per year. The capital cost will be $80,000.
Proposal B
The four grass courts will be covered with an air dome. It will be the only tennis facility with an
air dome in Tasmania. It is estimated that there will be an increase in court usage of 1,000 court
hours per year. The air dome will increase the tennis centers operating costs by $15,000 per year.
The capital cost of this project is $120,000.
Other details
The income raised per court hour while in use is estimated at $25.00 per hour.
The club will need to take a five-year loan from the bank in either case to raise the capital at 9%
interest per annum.
Search for a loan repayments calculator on the Internet to assist you with this problem.
Task number 11: Profit by Cost Centre
Overview of Exercise
The purpose of this exercise is to show methods for estimating the profitability of individual
"departments" within a business. In this example, the business is "ABC Company”, and it has
four departments - a leisure pool, a sports hall, squash courts and a sauna/jacuzzi area.
The profitability of departments in a business entity can only be calculated if all income and all
costs of each department are known, or at least estimated. This poses a challenge, as it is often
the case that a business has no way of measuring, with any accuracy, all the costs incurred by
each department. For example, typical overheads such as electricity, administration, insurance,
rates, and financing costs can only be arbitrarily divided between departments. (arbitrary = at
one's own discretion).
To estimate the profitability of individual departments, therefore, all overheads must be divided
up and apportioned among departments according to some form of internal metrics. In this
exercise, there are three types of internal metrics suggested:
A. The floor space of each department, measured in square meters (see table 4)
B. The proportion of the overall staff that work in the department (see table 5)
C. The capital cost of the building in which the department is situated if this is known (table 1)
Each of these criteria may be suitable as a means of apportioning different overheads. For
example, it might be suitable to choose floor space as the apportionment method for electricity
and/or rates. However, it would make sense to choose the proportion of the overall staff in each
department as a basis for apportioning the center manager’s salary and/or office administration
costs.
In this exercise, your task is to work out the profitability of each department using the given
template below. The task has been made easier for you, as the method for apportioning each
overhead has been selected for you. All you need to do is to perform the arithmetic and find out
how each department in ABC Company contributes to overall business profitability.
Your Scenario
The ABC Company was built at a cost of $6 Table 1: CAPITAL COST of Sports Centre
million (see Table 1) and has just finished its Department Capital Cost Capital Cost
first year of operation. $’000s %
The Centre has the following facilities: Leisure Pool 2,700 45%
• A leisure pool. Sports Hall 2,300 38%
• A multipurpose sports hall Changing / 200 3%
• Four (4) squash courts Sauna /
• Changing rooms that include saunas and Jacuzzis
Jacuzzis Squash 800 14%
Corby City Council, owners of the complex, Courts
is keen to find out the profitability of the Total 6,000 100%
 whole business and each of its departments Table 2: INCOME per Department
separately. Department $’000s
Leisure Pool 650
The total income from the complex was $1.55 Sports Hall 600
million and Table 2 provides a breakdown of Sauna / Jacuzzis 50
this amount per department. Squash Courts 250
Total 1550
The center had overhead costs of $400,000 Table 3: OVERHEADS to be apportioned
for the year. These costs are identified in $’000s
Table 3. Advertising 15
Auditors Costs 10
These costs must be apportioned across the Cleaning 20
four departments. The method of Electricity 40
apportionment for each overhead cost is given
Financing Cost 65
to you in the worksheet accompanying this
Insurance 10
exercise.
Maintenance 50
You will need the data in Tables 4 and 5 Managers Salary 100
below and Table 1 above to carry out the Office Costs 75
apportionment. Rates 40
Security 15
Staff Uniforms 5
Vehicle Costs 20
Total 400
You will notice that the apportionment figures from tables 1, 4 and 5 have been transferred to the
worksheet template.
Table 4: FLOOR SPACE for each department
Cost Centre Floor Area Floor Area
M2 %
Leisure Pool 1,400 47%
Sports Hall 1,200 40%
Changing/Sauna/Jacuzzis 100 3%
Squash Courts 300 10%
Total 3,000 100%
Table 5: Proportions of STAFFING ESTABLISHMENT
No of People Proportion
Leisure Pool Staff 14 43%
Sports Hall 10 30%
Sauna/Jacuzzi 4 12%
Squash Courts 5 15%
Total Full-Time Equivalent 33 100%
Template: Estimation of Departmental Profitability
Basis of Total Leisure Sports Sauna Squash
Apportionment $,000’s Pool Hall Jacuzzi Courts
$,000’s $,000’s $,000’s $,000’s
Income per Department Given in Table 1 1550 650 600 50 250

Total Income 1550 650 600 50 250

Floor Space 100% 47% 40% 3% 10%
Staff Establish 100% 43% 30% 12% 15%
Capital Cost 100% 45% 38% 3% 14%
Expenditure
Advertising 15
Auditors Costs 10
Cleaning 20
Electricity 40
Insurance 10
Maintenance 50
Managers Salary 100
Office Costs 75
Rates 40
Security 15
Staff Uniforms 5
Vehicle Costs 20

Total Expenditure

Profit Before Financing

Costs
Financing Costs Capital Cost 65
Profit After Financing
Costs
Task number 12: Generating Income
Overview of Exercise
Directors of the ABC Company anticipate that income for the forthcoming year will be earned
from the following sources:
• Player Registration Fees
• Game Fees
• Coaching Levy
• Canteen Sales
• Clothing and Equipment Sales
• Sponsorship
• Subsidy from Local Council
Your task in this exercise is to calculate the total income for the ABC Company for the seven (7)
courses of income listed above. You are provided with the information below.
Player Registration Fees
The club's membership is as follows:
Table 1: Club Membership
Players Teams
Juniors (5 - 10 years) 130 14
Juniors (11 - 16 years) 168 12
Youth (17 - 19 years) 16 1
Seniors 48 3
Veterans (Over 35 years) 16 1
Total 378 31

Registration Fees
Individual player registration Fees are as per Table 2. Insert the data from Table 1 and Table 2
into the Excel file and calculate the total income that will be generated from Registration Fees.
Table 2: Registration Fees
Juniors (5 - 10 years) $150
Juniors (11 - 16 years) $190
Youth (17 - 19 years) $190
Seniors $250
Veterans (Over 35 years) $200
Game Fees
All players play Game Fees each week of the season. A small proportion of game fees covers the
cost of referees, but the rest is general revenue that the club needs to sustain its operations. Game
fees are collected as follows:
Table 3: Game Fees
Season in Weeks Fee per Week
Juniors (5 - 10 years) 18 $5
Juniors (11 - 16 years) 18 $7
Youth (17 - 19 years) 22 $8
Seniors 22 $10
Veterans (Over 35 years) 18 $10

Coaching Levy
The Coaching Levy is $100 per player and only the first team of each age group (11 - 16 years)
is charged. The normal number of players in a team is 14. The Coaching levy covers the cost of
hiring a high standing coach for the first team. All other Junior teams, the Youth Team, Seniors
and Veterans are not charged Coaching Levy.
Canteen Sales
The Canteen is run by volunteers and is open as follows:
• For 20 weeks of the year it is open Friday nights (3 hours), all day Saturday (9am - 9pm) and
Sunday mornings (3 hours).
• For an additional 4 weeks of the year the canteen is open only on Saturdays from 4pm - 10pm.
The average sales per hour in the canteen are $200.
The amount of gross profit made in the Canteen is about 50% of total sales.
Clothing and Equipment Sales
The expected clothing and equipment sales are as follows:
Table 4: Clothing and Equipment Sales
Qty Cost Price Selling Price
Socks (pairs) 500 $7 $12
Training Shorts 300 $10 $15
Playing Shorts 300 $15 $20
Training Shirts 300 $15 $20
Footballs (size 3) 50 $12 $15
Footballs (size 4) 50 $13 $16
Footballs (size 5) 50 $14 $17
All the above items are bought for resale purposes.
Sponsorship
Sponsorship receipts are expected to be as follows:

Table 5: Sponsorship Receipts

Field Signage 10 $500
Major Sponsor $10,000
Other Sponsors $2,000

Subsidy from Local Council

The club receives a subsidy of $500 per month to maintain the park which is owned by the
council and leased to the club.
Task number 13: Create a Simple Financial Model
The purpose of this exercise is simply to demonstrate the power of using spreadsheets to provide
immediate information for financial decision making.
Your task
Use the provided excel spreadsheet to answer the following questions:
1. How much would ABC Company need to increase the price of ABC to make a profit of
$30,000? Assume you make no other changes other than increase price.
2. If ABC Company reduces the cost of Direct Materials by $2.00 per unit (from $20 to $18),
how does this improve profitability? Assume you make no other changes other than Direct
Materials.
3. If ABC Company increases Advertising expenditure by $15,000 (from $10,000 to $25,000),
how many more ABC would have to be sold to break even, if price stays the same at $100 each?
Requirement:
To solve the above questions, you should use 2 methods:
1. Simply make guesses and find the answers by trial and error. It should not take you long.
2. Use the ‘Goal Seek' function then the task is made easier.
Task number 14: Merchandising Budget
Your Scenario
ABC Company will be merchandising several products in conjunction with a forthcoming
Triathlon championship.
The seven (7) product lines to be merchandised are:
Item Cost Price
Polo Shirt 20.00
Competition Singlet 15.93
Competition Shorts 14.95
Training Shorts 10.95
Training Shirt 13.85
Sports Bag 20.30
Towel 15.65

ABC Company plans to purchase 100 items for each of the seven (7) products. The selling price
of all items will be 25% more than the purchase price.
Your Task
1. Your first task in this exercise is to utilize the Excel template provided to work out the total
profit on merchandising if all items are sold. Make a note of the total profit as you will need this
figure for the 2nd task.
2. An important aspect of this Excel template is that the viewer can make changes easily to
factors such as cost price, mark-up percentage and sales quantity and see what happens to total
profit. For your second task, calculate the percentage increase in total profit if the mark-up is
increased from 25% to 30% for all product lines, and items are sold.
3. Your last task is to use the spreadsheet to work out what mark-up is needed to achieve a total
profit of $4,800 if all items are sold
Task number 15: Monitoring Budget Performance
Your Task
In this exercise you are provided with an Excel template that compares actual income and
expenditure with budgeted income and expenditure. Your task is to calculate the variance
(difference) in dollar and percent terms. This task may seem straight forward but there are some
questions that need to be answered before it can be completed successfully.
Questions Answer
If actual income is greater than budgeted More income than expected is GOOD i.e.,
income, is this a favorable (good) or adverse favorable. Less income than expected is BAD
(bad) variance? i.e., adverse.
If actual expenditure is greater than budgeted More expense than expected is BAD i.e.,
expenditure, is this a favorable (good) or adverse. Less expense than expected is
adverse (bad) variance? GOOD i.e., adverse. This is the opposite
situation to income.
How does the reader know if the variance is a Show adverse variances, income, or
favorable or adverse variance by looking at expenditure, in brackets and favorable
the report? variances without brackets. This gets around
the confusing situation likely to occur with
negative and positive figures.
(2,000) = adverse variance
In this exercise you are not only required to calculate the variance in dollar terms but also in
percentage terms. The question arises, therefore, as to how the percent variance is calculated.
Once you have identified the amount of variance in dollars terms, you need to apply the formula
below.
Variance (in percent) = Variance (in dollars) ÷ Budget (in dollars)
In other words, when calculating the variance in percent terms, you need to use the budget as
your starting point. So, the variance is how much the actual differs from the budget.

THE END