“Module 2 – Case
COSTVOLUMEPROFIT
ANALYSIS
Case Assignment
The Annie Smith Dance Center
The Director of Annie Smith Dance Center is asking for assistance with the financial aspects of
running a professional group of performers. She wants financial information
presented in an easy to read format and a better understand of the
profitability of the concerts and the organization as a whole.
The Annie Smith the professional group features four dance concerts each year. Three of the dance
concerts showcase a different genre. The fourth performance is a Christmas
Spectacular, which is the most popular dance concert and is therefore scheduled
every year. Ms. Smith has tentatively scheduled the following four dance
concerts for the coming season. The schedule below shows the type and number of
performances and direct cost per type of concert. Examples of direct fixed
costs are costumes, rehearsals, royalties, guest artist fees, choreography, and
salaries of production staff, music, and wardrobe for each of the four
concerts.
Descriptions
Number of Performances
Cost per Dance Concert (direct
fixed costs)
Hip Hop Concert
10
$45,000
Jazz and Tap Dance
5
88,000
Modern Dance
10
95,000
Christmas Spectacular
20
25,000
$253,000
Additional costs:
Variable costs
associated with each performance are shown below.
Musicians
$7,500
Rental of auditorium
2,500
Dancers’ compensation
7,000
General administrative
and operating costs for the dance center are:
Administrative staff
$185,000
Insurance
25,000
Marketing
215,000
General office expenses
90,000
Lower
Orchestra Section (A)
Upper
Orchestra Section (B)
Descriptions
No. of
Seats
Ticket
Price
Tickets
Sold per Performance
No. of
Seats
Ticket
Price
Tickets
Sold per Performance
Hip Hop Performance
150
$85
100%
450
$50
90%
Jazz and Tap Dance
150
$85
100%
450
$50
60%
Modern Dance
150
$85
100%
450
$50
95%
Christmas Spectacular
150
$125
100%
450
$50
100%
Required:
Computations (use
Excel)
Summarize key financial information in a table
as shown below.
Title
Name of
Dance Concert
Revenues/Performance
Variable
Costs/Performance
Contribution
Margin/Performance
Total
Contribution/Type of Dance Concert
Direct
Fixed Costs
Segment
Margin/Type of Concert
1.
2.
3.
4.
Total
Prepare a segmented income statement in good
format.
Compute the number of performances required to
break even for each concert. These are separate computations for each dance
concert.
Compute break even for the organization as a
whole and express the result in revenues instead of the number of performances.
Ms. Smith wants to performance group to show
at least $150,000 in operating profit. What level of revenues does the
performance group need to achieve to meet this goal?
Give a recommendation about changes Ms. Smith
can make to achieve the target profit. Support your idea with computations.
Memo (use Word)
Write a four or five
paragraph memo to the owner of the dance center to assist her in interpreting
the financial analysis. Start with an introduction and end with a
recommendation. Each of the four or five paragraphs should have a heading.
Short Essay (use Word)
Start with an
introduction and end with a summary or conclusion. Use headings.
What are some shortcomings of multi-product
even analysis?
How does demand and resource constraints
affect this type of analysis.
Assignment Expectations
Each submission should
include two files: (1) An Excel file; and (2) A Word document. The Word
document shows the memo first and short essay last. Assume a
knowledgeable business audience and use required format and length. Individuals
in business are busy and want information presented in an organized and concise
manner.
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Module 2 – CaseCOSTVOLUMEPROFIT
ANALYSISCase AssignmentThe Annie Smith Dance CenterThe Director of Annie
Smith Dance Center is asking for assistance with the financial aspects of
running a professional group of performers. She wants financial information
presented in an easy to read format and a better understand of the
profitability of the concerts and the organization as a whole.The Annie Smith
professional group features four dance concerts each year. Three of the dance
concerts showcase a different genre. The fourth performance is a Christmas
Spectacular, which is the most popular dance concert and is therefore scheduled
every year. Ms. Smith has tentatively scheduled the following four dance
concerts for the coming season. The schedule below shows the type and number of
performances and direct cost per type of concert. Examples of direct fixed
costs are costumes, rehearsals, royalties, guest artist fees, choreography, and
salaries of production staff, music, and wardrobe for each of the four
concerts.DescriptionsNumber of PerformancesCost per Dance Concert (direct
fixed costs)Hip Hop Concert10$45,000Jazz and Tap Dance588,000Modern Dance1095,000Christmas Spectacular2025,000 $253,000Additional costs:Variable costs
associated with each performance are shown below.Musicians$7,500Rental of auditorium2,500Dancers’ compensation7,000General administrative
and operating costs for the dance center are:Administrative staff$185,000Insurance25,000Marketing215,000General office expenses90,000 Lower
Orchestra Section (A)Upper
Orchestra Section (B)DescriptionsNo. of
SeatsTicket
PriceTickets
Sold per PerformanceNo. of
SeatsTicket
PriceTickets
Sold per PerformanceHip Hop Performance150$85100%450$5090%Jazz and Tap Dance150$85100%450$5060%Modern Dance150$85100%450$5095%Christmas Spectacular150$125100%450$50100%Required:Computations (use
Excel) Summarize key financial information in a table
as shown below.TitleName of
Dance ConcertRevenues/PerformanceVariable
Costs/PerformanceContribution
Margin/PerformanceTotal
Contribution/Type of Dance ConcertDirect
Fixed CostsSegment
Margin/Type of Concert1. 2. 3. 4. Total Prepare a segmented income statement in good
format. Compute the number of performances required to
break even for each concert. These are separate computations for each dance
concert. Compute break even for the organization as a
whole and express the result in revenues instead of the number of performances. Ms. Smith wants to performance group to show
at least $150,000 in operating profit. What level of revenues does the
performance group need to achieve to meet this goal? Give a recommendation about changes Ms. Smith
can make to achieve the target profit. Support your idea with computations.Memo (use Word)Write a four or five
paragraph memo to the owner of the dance center to assist her in interpreting
the financial analysis. Start with an introduction and end with a
recommendation. Each of the four or five paragraphs should have a heading.Short Essay (use Word)Start with an
introduction and end with a summary or conclusion. Use headings. What are some shortcomings of multi-product
even analysis? How does demand and resource constraints
affect this type of analysis.Assignment ExpectationsEach submission should
include two files: (1) An Excel file; and (2) A Word document. The Word
document shows the memo first and short essay last. Assume a
knowledgeable business audience and use required format and length. Individuals
in business are busy and want information presented in an organized and concise
manner..trident.edu/privacy-policy””>Privacy Policy|.trident.edu/university-information/contact-us””>Contact”
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