In: Accounting
Due to budget cutbacks, colleges and universities across the country are struggling to cut expenses. Frequent casualties of these money-saving decisions are organized sports teams. Suppose that a fictional college, West Tennessee State (WTS), has identified three teams to eliminate in its effort to cut costs: Men's Lacrosse, Women's Softball, and Men's Diving. A summary of each sports annual revenue and costs was provided in the question below.
Revenue for men's lacrosse is $25,600 for women's softball is
$37,800 for men's diving is $14,900.
Less: expenses for scholarships for men's lacrosse(ML) is $150,000
for women's softball (WS) is 130,000 and for men's diving (MD)
40,000
coaches salaries: ML 53,000 WS 49,700 MD 62,800 for team travel ML
21,100 WS 28,500 and MD 13,200
venue maintenance ML 15,000 WS 20,000 MD 35,000
equipment ML 4,300 WS 2,800 MD 800
team support ML 16,600 WS 11,200 MD 6,300
net operating income (loss) ML 234,400 WS 204,400 MD 143,200.
The combined net loss from these three programs is $582,000. I need
help with questions 1,2,&4 as follows
#1: If the three programs were eliminated, do you think WTS would see an immediate improvement in its bottom line? Why or why not?
#2: Determine whether each individual line item would completely be eliminated, partially eliminated, or not eliminated. Label the items as avoidable, partially avoidable, or unavoidable, and explain any assumptions you made in determining the classification.
#3: Research actual examples of colleges or universities that have eliminated sports programs. List five that have eliminated sports teams in the past three years and identify which teams were eliminated.