ACC 650 Week 5 discussion 2 answer to professor

Review Case 8.32 in your textbook. Using the questions provided as a guide, discuss your recommendation(s) regarding what the company should do about the conference. Support your recommendation(s) with calculations based on the data provided.

To participate in follow-up discussion, ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.

Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.

BEENA RESPONSE

Hello Sir and Class,

Discussion

a) The options available include undertaking it as planned, rescheduling, or canceling it.

b) Proforma Income Statements

Go through

Postponing to a future date

Canceling

Total number of attendees

1

0

10

0

0

Registration fee per attendee

695

695 for 90% and 595 for 10%

Revenue

6950

68

500

Less Costs

Meals

1500

15000

0

Conference materials

750

7500

0

Fixed Costs

Advertising

600

0

7500
6000

Rent

9500

4500

100

0

0

Equipment

500
500
0

Speakers fees:

Newton

600
600

Smith

200

0

2000

Townsley

4000

4000

1000

Travel Expenses

Newton
200
200
Smith

800

900

800
Townsley
1000

Compton

200
200

Net Income

(-20200)

25800

(-17800)

c) Adjusted Income Statement

Go through
Postponing to a future date
Canceling
Total number of attendees
10
100
0
Registration fee per attendee
695
695 for 90% and 595 for 10%
Revenue
6950

68500

Less Costs
Meals
1500
15000
0
Conference materials
750
7500
0
Fixed Costs
Advertising
1500
Rent
9500
4500

10000

Equipment
500
500
0
Speakers fees:
Newton
600
600
Smith
2000
2000
Townsley

3000

3000
Travel Expenses
Newton
200
200
Smith
100
Townsley
1000
Compton
200
200
Net Income

(-12300)

33400

(-10,000)

c) If the conference is held as scheduled, no additional marketing costs will have to be incurred. Not canceling the reserved venue will also save money, and some speakers will not incur additional travel expenses. On the downside, this option also means fewer people will be at the conference, and additional rent expenses will have to be incurred.

d) Canceling the event does not yield significant gains. Instead, a $10,000 cancellation fee will have to be incurred, which will represent a loss.

e) If the conference is rescheduled, the cancellation fee will not be incurred, and there will be enough attendees to avoid the $5,000 penalty. On the downside, some speakers will need additional travel costs to make it on time, and additional fliers will also need to be made.

f) In the short term, the conference provides Flagstone with many insights on how to manage such events in the future if costs are to be kept down. In the long term, the company stands to gain from the information gained on how to organize such conferences.

Unread

Julia and Beena, thanks for your response to the case. They have 3 options. Option 1:  Hold conference as planned with 10 attendees currently registered. Option 2:  Cancel the conference and return conference fees

If you reschedule conference for Dec. 8th and 9th. What cost would you avoid and which would you still have to pay?