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see the attached file. Portia Carter is the president of a company that owns six multiplex movie theaters.  Carter has delegated decision-making authority to the theater managers for all decisions except those relating to capital expenditures and film selection.  The theater managers' compensation depends on the profitability of their theaters.  Max Burgman, the manager of the Park Theater, had the following master budget and actual results for the month. Master Actual Budget Results Tickets sold 120,000 480,000 Revenue--tickets $  840,000 $  880,000 Revenue--concessions 480,000 330,000 Total revenue $1,320,000 $1,210,000 Controllable variable costs Concessions 120,000 99,000 Direct labor 420,000 330,000 Variable overhead 540,000 550,000 Contribution margin $  240,000 $  231,000 Controllable fixed costs Rent 55,000 55,000 Other administrative expenses 45,000 50,000 Theater operating income $  140,000 $  126,000 1. Assuming that the theaters are profit centers, prepare a performance report for the Park Theater using the chart below.  Include a flexible budget.  Determine the variances between actual results, the flexible budget, and the master budget.  (25 points) Actual Flexible Master Results Variance Budget Variance Budget Tickets sold 110,000 (   ) 120,000 Revenue--tickets $  880,000 (   ) (   ) $  840,000 Revenue--concessions 330,000 (   ) (   ) 480,000 Total revenue $1,210,000 (   ) $1,320,000 Controllable variable costs Concessions 99,000 (   ) (   ) 120,000 Direct labor 330,000 (   ) (   ) 420,000 Variable overhead 550,000 (   ) (   ) 540,000 Contribution margin $  231,000 (   ) (   ) $  240,000 Controllable fixed costs Rent 55,000 55,000 Other administrative expenses 50,000 (   ) 45,000 Theater operating income $  126,000 (   ) (   ) $  140,000 2. Evaluate Burgman's performance as a manager. (25 points) Assignment 04 BU330 Accounting for Managers Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth University for grading.  Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar.  Sources must be cited in APA format.  Your response should be a minimum of one (1) single-spaced page to a maximum of two (2) pages in length; refer to the "Assignment Format" page for specific format requirements. Return on Investment and Residual Income Portia Carter is the president of a company that owns six multiplex movie theaters. Carter has delegated decision-making authority to the theater managers for all decisions except those relating to capital expenditures and film selection. The theater managers’ compensation depends on the profitability of their theaters. Max Burgman, the manager of the Park Theater, had the following master budget and actual results for the month. Master Actual Budget Results Tickets sold 120,000 480,000 Revenue--tickets $ 840,000 $ 880,000 Revenue--concessions 480,000 330,000 Total revenue $1,320,000 $1,210,000 Controllable variable costs Concessions 120,000 99,000 Direct labor 420,000 330,000 Variable overhead 540,000 550,000 Contribution margin $ 240,000 $ 231,000 Controllable fixed costs Rent 55,000 55,000 Other administrative expenses 45,000 50,000 Theater operating income $ 140,000 $ 126,000 1. Assuming that the theaters are profit centers, prepare a performance report for the Park Theater using the chart below. Include a flexible budget. Determine the variances between actual results, the flexible budget, and the master budget. (25 points) Actual Flexible Master Results Variance Budget Variance Budget Tickets sold 110,000 ( ) 120,000 Revenue--tickets $ 880,000 ( ) ( ) $ 840,000 Revenue--concessions 330,000 ( ) ( ) 480,000 Total revenue $1,210,000 ( ) $1,320,000 Controllable variable costs Concessions 99,000 ( ) ( ) 120,000 Direct labor 330,000 ( ) ( ) 420,000 Variable overhead 550,000 ( ) ( ) 540,000 Contribution margin $ 231,000 ( ) ( ) $ 240,000 Controllable fixed costs Rent 55,000 55,000 Other administrative expenses 50,000 ( ) 45,000 Theater operating income $ 126,000 ( ) ( ) $ 140,000 2. Evaluate Burgman’s performance as a manager. (25 points) 3. Assume that the managers are assigned responsibility for capital expenditures and that the theaters are thus investment centers. Park Theater is expected to generate a desired ROI of at least 6 percent on average invested assets of $2,000,000. a. Compute the theater’s return on investment and residual income using the chart below. (25 points) Actual Flexible Master ROI ч ч ч = 0.00% = 0.00% = 0.00% Residual income – ( 0% x ) – ( 0% x ) – ( 0% x ) = = = b. Using the ROI and residual income, evaluate Burgman’s performance as a manager. (25 points) This is the end of Assignment 04.
Chapter 8 Managerial accounting.docx

Portia Carter is the president of a company that owns six multiplex movie theaters. Carter has delegated
decision-making authority to the theater managers for all decisions except those relating to capital
expenditures and film selection. The theater managers' compensation depends on the profitability of their
theaters. Max Burgman, the manager of the Park Theater, had the following master budget and actual
results for the month.
Master Actual
Budget Results
Tickets sold
120,000
480,000
Revenue--tickets
$ 840,000
$ 880,000
Revenue--concessions 480,000
330,000
Total revenue $1,320,000
$1,210,000
Controllable variable costs
Concessions 120,000
99,000
Direct labor
420,000
330,000
Variable overhead
540,000
550,000
Contribution margin
$ 240,000
$ 231,000
Controllable fixed costs
Rent 55,000 55,000
Other administrative expenses 45,000 50,000
Theater operating income
$ 140,000
$ 126,000
1.
Assuming that the theaters are profit centers, prepare a performance report for the Park Theater
using the chart below. Include a flexible budget. Determine the variances between actual results, the
flexible budget, and the master budget. (25 points)
Actual
Flexible
Master
Results Variance
Budget Variance
Budget
Tickets sold
110,000
()
120,000
Revenue--tickets
$ 880,000
()
()
$ 840,000
Revenue--concessions 330,000
()
()
480,000
Total revenue $1,210,000
()
$1,320,000
Controllable variable costs
Concessions 99,000
()
()
120,000
Direct labor
330,000
()
()
420,000
Variable overhead
550,000
()
()
540,000
Contribution margin
$ 231,000
()
()
$ 240,000
Controllable fixed costs
Rent 55,000
55,000
Other administrative expenses 50,000
()
45,000
Theater operating income
$ 126,000
()
()
$ 140,000
2.
Evaluate Burgman's performance as a manager.
Return on Investment and Residual Income
Portia Carter is the president of a company that owns six multiplex
movie theaters. Carter has delegated decision-making authority to the
theater managers for all decisions except those relating to capital
expenditures and film selection. The theater managers  compensation
depends on the profitability of their theaters. Max Burgman, the
manager of the Park Theater, had the following master budget and actual
results for the month.
Master Actual
Budget Results
Tickets sold
120,000
480,000
Revenue--tickets
$ 840,000
$ 880,000
Revenue--concessions 480,000
330,000
Total revenue $1,320,000
$1,210,000
Controllable variable costs
Concessions 120,000
99,000
Direct labor
420,000
330,000

Variable overhead
540,000
550,000
Contribution margin
$ 240,000
$ 231,000
Controllable fixed costs
Rent 55,000 55,000
Other administrative expenses 45,000 50,000
Theater operating income
$ 140,000
$ 126,000
1.
Assuming that the theaters are profit centers, prepare a performance
report for the Park Theater using the chart below. Include a flexible
budget. Determine the variances between actual results, the flexible
budget, and the master budget. (25 points)
Actual
Flexible
Master
Results Variance
Budget Variance
Budget
Tickets sold
110,000
()
120,000
Revenue--tickets
$ 880,000
()
()
$ 840,000
Revenue--concessions 330,000
()
()
480,000
Total revenue $1,210,000
()
$1,320,000
Controllable variable costs
Concessions 99,000
()
()
120,000
Direct labor
330,000
()
()
420,000
Variable overhead
550,000
()
()
540,000
Contribution margin
$ 231,000
()
()
$ 240,000
Controllable fixed costs
Rent 55,000
55,000
Other administrative expenses 50,000
()
45,000
Theater operating income
$ 126,000
()
()
$ 140,000
2.
Evaluate Burgmans performance as a manager. (25 points)
3.
Assume that the managers are assigned responsibility for capital
expenditures and that the theaters are thus investment centers. Park
Theater is expected to generate a desired ROI of at least 6 percent on
average invested assets of $2,000,000.
a.
Compute the theaters return on investment and residual income
using the chart below.
b.
Using the ROI and residual income, evaluate Burgmans performance
as a manager.

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