For many shows it is difficult to stay within the budget, since the Pavilion serves a five-market region consisting of Raleigh-Durham, Fayetteville, Wilmington, Greensboro, and the Carolina Coast. Pace Entertainment would pay income taxes on earnings from the use of the facility.
These are then added to the direct costs for concessions, merchandise, parking, and insurance to determine total operating expenses. While not all events developed exactly as expected at the time of preparing the budget for the year, there were no major surprises during the year.
For which type of performer fixed fee or per capita is breakeven analysis particularly important, and why? The cost of the performing artist has also increased dramatically.
The report shows the variety of revenues and costs for a concert, and the projected profit for the concert. Operating expenses include an allocation of the total of fixed production and operations costs for the season, the advertising expenses for the KFBS Allstars event, and other variable expenses.
Explain sensitivity analysis could be used to better understand the uncertainty surrounding the how KFBS Allstars event. Comp customers also bring in revenue for parking, concessions, and merchandise sales.
Comp customers also bring in revenue for parking, concessions, and merchandise sales. Do you think that it is likely that the Pavilion will break even? Exhibit 1 shows the stage and seating of the amphitheater. The advertising rates in the Raleigh-Durham region are comparable to the rates in Washington, D.
Prior to developing advertising plans, the marketing staff analyzes ticket sales geographically over the five-market region.
Some artists are paid on a fixed-fee basis, while others are paid on a per capita basis. Other revenues include per capita facility charges paid by the sponsoring corporation for naming rights based on paid ticket holders and a per capita service charge paid by the performer for food, transportation, and other services.
A seats and B seats are regular price tickets for the reserved and lawn seating sections respectively; C and D seats are promotional discount price tickets for reserved and lawn seating, respectively.
The demand for the outdoor facility came about because the rapidly growing city of Raleigh lacked a major entertainment complex. A time is specified for gate openings, and once the gate is opened the show is underway.
It is also important because of the increased cost of advertising. It has 78 theater-style VIP boxes that can accommodate 4, 6, or 8 people. Reserved and lawn seating areas are shown in Exhibit 1. Assume the show is expected to draw 6, paying ticket holders.
Finally, the budget of each department sales, marketing, and operations is reviewed by the accounting department, which provides overall financial anagement of the project. Other revenues include per capita facility charges paid by the sponsoring corporation for naming rights based on paid ticket holders and a per capita service charge paid by the performer for food, transportation, and other services.
What do you think it should be?
Finally, the budget of each department sales, marketing, and operations is reviewed by the accounting department, which provides overall financial anagement of the project.
These are then added to the direct costs for concessions, merchandise, parking, and insurance to determine total operating expenses. Pam uses the flash report to plan potential concerts and to evaluate the success of concerts already presented. Also, there are a number of other methods used to make the concerts more profitable.Case Cost Volume Profit (CVP) Analysis and Strategy: The ALLTEL Pavilion Question The ALLTEL Pavilion in Raleigh, North Carolina is an outdoor amphitheater that provides live concerts to the public from April through October each year.
First, a group or performer with an interest in performing at ALLTEL will discuss with Cellar Door, Inc. and the Pavilion the possibility of performing at Issues in Accounting Education, November The ALLTEL Pavilion Case: Strategy and CVP Analysis the Pavilion, and look at the open dates.
Case Cost-Volume-Profit Analysis and Strategy: The ALLTEL Pavilion Andrea Mullens 1) The competitive strategy of the ALLTEL Pavilion is largely focused on differentiation. With no substantial competitors in the geographic region, they are looking to create an “experience” for the audience and thus maintain the sustainability of the.
Due: Submit a copy of your essay via “Assignment Manager” by Thursday, November 13th, before your recitation begins. Then, as before, bring a printed copy of your paper to your recitation and be prepared to discuss this case.
Issues in Accounting Education, November The ALLTEL Pavilion Case: Strategy and CVP Analysis EXHIBIT 1 ALLTEL Pavilion Stage and Seating The Pavilion can accommodate 20, fans with 7, reserved seats directly in front of the stage (covered seating in sections 1 through 9 and VIP seating) and another 13, on the spacious.
The ALLTEL Pavilion case is intended for the undergraduate management accounting or cost accounting course and the M.B.A. management accounting course.
It provides an excellent context in which to examine strategic issues in using cost volume profit (CVP) in a service business. Based on an actual entertainment pavilion, the case develops .Download