Individual Project 5 Excel Sheet.xlsx

Individual Project 5 Excel Sheet.xlsx - Assumptions...

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Unformatted text preview: Assumptions For-Profit 1 20% of marketing expenses are fixed; the rest are variable; all other expenses are fixed 2 Next year they plan to double their fixed marketing expenses and as a result will increase ticket sales by 25%. 3 Gift shop sales vary directly with ticket sales; gift shop COGS is 50% of sales but is expected to grow to 55% of sales. Nonprofit 1 Ticket sales are low because the restricted government grants are to subsidize ticket prices just to children 12 and under. 2 It is expected that total children and adult traffic will increase 25% as the result of increased marketing expenses. 3 20% of marketing expenses are fixed; the rest are variable; all other expenses are fixed 4 The adult:child ratio of visitors will remain the same as this year. 5 The fundraising effort will help pay for gift shop inventory such that COGS for the gift shop will drop from 50% to 40%. 6 Gift shop sales will continue to vary directly with ticket sales. 7 Next year they plan to double their fixed marketing expenses, and as a result will increase ticket sales by 25%. 8 To be able to subsidize the increase ticket sales they will have to double fundraising to $200,000. This will require an additional fundraising expense of $50,000 beyond this year's level, plus an additional $20,000 of salaries for additional headcount. 9 Due to the lower tax revenue of the city government from the recession, the museum's grant will be cut by half. For-Profit Dinosour Museum Income Statement This Yr Next Yr Budget Ticket sales Gift shop sales Total sales Salaries & benefits Gift shop COGS Marketing Maintenance Skeleton depreciation Building lease Utilities Interest on debt Total expense Before tax income Tax @ 40% After-tax income $600,000 200,000 800,000 100,000 100,000 100,000 90,000 20,000 20,000 40,000 40,000 510,000 290,000 (116,000) 174,000 100,000 fixed expenses so same 137,500 55% of gift shop sales 140,000 fixed part doubled to $40k. 90,000 fixed expenses so same 20,000 fixed expenses so same 20,000 fixed expenses so same 40,000 fixed expenses so same 40,000 fixed expenses so same 587,500 412,500 (165,000) 247,500 Nonprofit Dinosaur Museum Statement of Activities Reason $750,000 increase sales by 25%. 250,000 grows directly as sales 1,000,000 This Yr Next Yr Budget Operating revenues Ticket sales Gift shop sales Total Operating Revenue Operating Expenses Salaries & benefits Gift shop COGS Marketing Maintenance Skeleton depreciation Building lease Utilities Interest on debt Total operating expenses Operating income Non-operating Revenue Fundraising Govt. Grants [Fundraising expenses] Net non-operating revenue Increase in net assets Net assets at beg. of yr. Net assets at end of yr. Reason $100,000 200,000 300,000 $125,000 increase sales by 25% due to high marketing 250,000 vary directly with ticket sales. Increase 25% 375,000 200,000 100,000 100,000 80,000 10,000 120,000 50,000 40,000 700,000 (400,000) 220,000 additional $20k for additional headcount for fundraising 100,000 due to fundraising, COGS dropped from 50% to 40% 140,000 fixed marketing doubled to $40k. 80,000 all other expenses are fixed 10,000 all other expenses are fixed 120,000 all other expenses are fixed 50,000 all other expenses are fixed 40,000 all other expenses are fixed 760,000 (385,000) 100,000 200,000 (40,000) 260,000 (140,000) 200,000 double fundraising to subsidize increased ticket sales 100,000 grant cut by half due to low taxes (90,000) because of increased fundraising 210,000 (175,000) 490,000 350,000 350,000 175,000 2968000 ...
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