Identify and discuss the factors that are primarily responsible for the difference between the…

We're the ideal place for homework help. If you are looking for affordable, custom-written, high-quality and non-plagiarized papers, your student life just became easier with us. Click either of the buttons below to place your order.


Order a Similar Paper Order a Different Paper

(Profit center performance) The accounting department at Kerrville College has decided to offer a three-day ethics workshop for local CPAs in March 2010. Rose Morris, a tenured professor, will supervise the seminar’s planning process and has sub-mitted the following budget to the departmental chairperson:

Revenues ($900 per participant)

$90,000

Expenses

Speakers ($2,500 each)

$15,000

Rent on facilities

3,600

Advertising

4,000

Meals and lodging

33,390

Departmental overhead allocation

23,560

(79,550)

Profit

$10,450

The $3,600 facilities rent is a fixed rental, which is to be paid to a local hotel for the use of a meeting room. Advertising is also a fixed cost. Meal expense is budgeted at $10 per person per meal (a total of nine meals to be provided for each participant and each speaker); lodging is budgeted at the rate of $75 per participant and speaker per night. Departmental overhead includes a $10 charge per participant and speaker for supplies as well as a general allocation of 25 percent of revenues for use of departmental secretarial and production resources. The budget was approved and Morris proceeded with the seminar.

a. Recast the budget in a segment margin income statement format.

b. The seminar’s actual financial results were as follows:

Revenues (120 participants)

$102,000

Expenses

Speakers ($2,950 each)

$17,700

Rent on facilities

4,200

Advertising

4,900

Meals and lodging

41,391

Departmental overhead allocation

26,760

(94,951)

Profit

$ 7,049

Because signups were below expectations, the seminar fee was reduced from $900 to $850 and advertising expense was increased. In budgeting for the speakers, Morris neglected to include airfare, which averaged $450 per speaker. With the increased attendance, a larger meeting room had to be rented from the local hotel. Actual lodging costs were as budgeted, but meals were 15 percent more expensive because of the gratuity. Recast the actual results in a segment margin income format.

c. Identify and discuss the factors that are primarily responsible for the difference between the budgeted and the actual profit on the ethics seminar.

Writerbay.net

Do you need academic writing help? Our quality writers are here 24/7, every day of the year, ready to support you! Instantly chat with a customer support representative in the chat on the bottom right corner, send us a WhatsApp message or click either of the buttons below to submit your paper instructions to the writing team.


Order a Similar Paper Order a Different Paper
Writerbay.net