Cost behavior Questions, accounting homework help
Scenario: Shelley Jones has just been elected as president of the Circular Club of Auburn, Kansas, and she has been asked to suggest a new fundraising activity for the club. After a considerable amount of research, Shelley proposed the Circular Club sponsor a professional rodeo. In her presentation to the club, Shelley recommends the fundraiser become an annual activity with the following goals:
Rather than hire the local catering company to cater the Contestant Hospitality Tent, members of the Circular Club are considering asking Shady’s Bar-B-Q to cater the event in exchange for a $600 Major Sponsor spot. In addition, The Fun Shop, a local party supply business, will be asked to donate a tent to use for the event. The Fun Shop will also be given a $600 Major Sponsor spot. Several members of the Club are opposed to this consideration, arguing that the two Major Sponsor spots will take away from the money to be earned through other sponsors. Adrian Stein has explained to the members the Major Sponsor signs for the arena cost only $48 each. In addition, there is more than enough room to display two additional sponsor signs.
Here are the questions I need answered:
- What would you encourage the Club to do concerning the Contestant Hospitality Tent?
- Would your answer be different if the arena were limited in the number of additional signs that could be displayed?
- What kind of cost would you consider in this situation that would not be found on a financial statement?
- Assume you are elected chair of the rodeo committee for next year. What steps would you suggest the committee take to make the rodeo profitable?
