The Little Theatre is a nonprofit organization devoted to staging plays for children. The theater has a very small full-time professional administrative staff. Through a special arrangement with the actors’ union, actors and directors rehearse without pay and are paid only for actual performances.

The Little Theatre had tentatively planned to put on six different productions with a total of 108 performances. For example, one of the productions was Peter Rabbit, which had a six-week run with three performances on each weekend. The costs from the current year’s planning budget appear below.

Some of the costs vary with the number of productions, some with the number of performances, and some are fixed and depend on neither the number of productions nor the number of performances. The costs of scenery, costumes, props, and publicity vary with the number of productions. It doesn’t make any difference how many times Peter Rabbit is performed, the cost of the scenery is the same. Likewise, the cost of publicizing a play with posters and radio commercials is the same whether there are 10, 20, or 30 performances of the play. On the other hand, the wages of the actors, directors, stagehands, ticket booth personnel, and ushers vary with the number of performances. The greater the number of performances, the higher the wage costs will be. Similarly, the costs of renting the hall and printing the programs will vary with the number of performances. Administrative expenses are more difficult to analyze, but the best estimate is that approximately 75% of the budgeted costs are fixed, 15% depend on the number of productions staged, and the remaining 10% depend on the number of performances.

After the beginning of the year, the board of directors of the theater authorized expanding the theater’s program to seven productions and a total of 168 performances. Not surprisingly, actual costs were considerably higher than the costs from the planning budget. (Grants from donors and ticket sales were also correspondingly higher, but are not shown here.) Data concerning the actual costs appear below:

Required:

1. Prepare a flexible budget for The Little Theatre based on the actual activity of the year.

2. Prepare a report for the year that shows the spending variances for all expense items.

Case 2 (Special Order)

While Jurassic World is filled to capacity with tourists most of the year, the theme park experiences a lower number of customers during September and October. This is due to the fact that September and October are “rainy season” in Jurassic World’s location—the island of Isla Nublar, off the coast of Costa Rica.

To celebrate their sponsorship of the Pepsisaurus and the Tostidodon, PepsiCo is interested in holding a 3-day, 2-night corporate retreat for 5,000 of its employees at Jurassic world during September. PepsiCo has told Claire that they would pay Jurassic World $200 per employee. This would provide each employee with three days of park admission, three days of meal and drink vouchers, and two nights of lodging. Additionally, PepsiCo wants Jurassic World to treat its employees to behind-the-scenes tours of the park, which would cost a total of $50,000 to plan and facilitate. Due to the timing of the retreat, Jurassic World has ample capacity to host PepsiCo’s employees.

Claire knows that Jurassic World normally charges $850 per person for a 3-day, 2-night admission, lodging, and meal/drink vacation package. The per person cost for this package is 670, as shown below:

Most of the overhead is the fixed cost of running the theme park, and goes towards marketing, administration, dinosaur bioengineering, customer service, grounds keeping and maintenance, dinosaur food, raptor training, and disaster control. However, $35 is variable with respect to the number of customers in the theme park.

4. Determine the incremental revenue to Jurassic World if Claire accepts PepsiCo’s request. (1 point for the correct answer in the shaded box)

5. Determine the incremental cost to Jurassic World if Claire accepts PepsiCo’s request. (1 point for the correct answer in the shaded box)

6. Should Claire accept PepsiCo’s offer? Circle One. (1 point for the correct answer)

YES                                     NO

How does bundling payments, like insurance companies paying a per diem rate for all hospital hotel-type services, encourage cost savings on the part of the hospital?

Propose an initial risk register for constructing a Recreational Park Project. The risk register should contain a minimum of 10 risks. * Use a template of your choice for risk register.

determine the beta for Starwood Hotel (HOT), Disney (DID), Abbott Laboratories (ABT), and Lockheed Martin (LMT). Discuss the possible reasons for the differences you observe among these companies.

Formulate the outline of a precision pricing policy for a four-star hotel designed to accommodate business guests as well as tourists from all over the world. Explain your answer

Pleasanton Studios Kersten Brown, the CEO of Pleasanton Studios, is having a tough week – all three of her top management level employees have dropped in with problems. One executive is making questionable decisions, another is threatening to quit, and the third is reporting losses (again). Kersten is hoping to find simple answers to all her difficulties. She is asking you (her accountant) for some advice on how to proceed. Pleasanton Studios owns and operates three decentralized divisions: Entertainment, Streaming, and Parks. Pleasanton Studios has a decentralized organizational structure, where each division is run as an investment center. Division managers meet with the CEO at least once annually to review their performance, where each division manager’s performance is measured by their division’s return on investment (ROI). The division manager then receives a bonus equal to 10% of their base salary for every ROI percentage point above the cost of capital. The Entertainment division manager, John Freeman, was the first to knock on Kersten’s door this morning. Entertainment, Pleasanton Studios’ first endeavor, produces movies for the big screen. Entertainment has been in operation since 1965. Last month, John had mentioned a proposal to build a new animation studio. The build would cost $4,910,000 with an estimated life of 20 years and no salvage value and would allow Entertainment to start producing animated movies. Animated movies were projected to bring in an additional $1,210,000 in revenues each year, but would increase annual production costs by $574,000. John had dropped in to let Kersten know he had decided not to move forward with the animation studio. This surprised Kersten – her quick mental calculation indicated that the studio would have a payback period of 8 years, much shorter than the expected life of the studio. Not entirely sure that her quick assessment was valid, Kersten needed to check with her accountant on the matter. Next to Kersten’s door was the manager of Streaming, which produces short-form (30 minute to one hour) episodes in addition to streaming the movies developed by Entertainment. Customers then buy subscriptions to the service. Run by division manager Reyna Imanah, Streaming was introduced in 2016 and has increased subscriptions by 20% every year since. Reyna’s complaint was that, based on the current bonus payout schedule, John Freeman’s bonus last year was significantly higher than hers. She points to the increasing subscription rates at Streaming, and says that her division is being punished for having opened so recently (her division’s facilities are much more recent than those in Entertainment). She currently has an employment offer from another company at the same base pay rate, and stated that she will accept this offer unless she feels her performance is being appropriately acknowledged and compensated. Kersten needs to look at the relative performance across divisions to determine how to proceed with Reyna. Pleasanton Parks is a theme park based on the movies from Entertainment and the series from Streaming. For many years, it was a popular year-round destination, with characters, rides, and a hotel. This park has lost popularity in recent years, and has been ‘in the red’ for the past two years. If the park is not profitable this year, you will need to decide whether to permanently close that division. Included in the ‘Fixed COGS’ for Parks is an annual $1,650,000 mortgage payment on the land and buildings for the park, which would still need to be paid (as a corporate level cost) if the park is closed and that segment is removed from the financial statements. Incidentally, you recently had a conversation with a Marriott Hotels executive, who would like to expand into the area. If you decided to close Parks, you are fairly certain that you could lease the hotel facilities to Marriott for $650,000 annually. A partial report of this year’s financial results for Pleasanton Studios can be found in Table 1 below. The ‘Selling and admin costs’ listed in Table 1 are directly incurred by each division, and are determined at the beginning of each year (that is, they do not change with increased/decreased production). In addition to the divisional information above, there are $2,000,000 in corporate costs that are currently allocated evenly between the three divisions. These costs are primarily due to employee benefits costs, which are billed at the corporate level. If the Parks division is closed, the decreased employee base would reduce allocated corporate costs by $500,000. Pleasanton Studios has a cost of capital of 12 percent (and Kersten uses the cost of capital as their required rate of return) and are subject to 32% income taxes. Before she can make any decisions, Kersten needs to evaluate this year’s performance results. She sets off to see you, the company’s accountant, for answers.

Required: Write your response in the form of a 1-2 page memo to Kersten Brown, from the perspective of the company accountant. Be sure to include all the financial analyses to support your conclusions, clearly showing your calculations, at the end of the memo or attached in a separate document. Be sure to address the following points in your memo.

a. Evaluate this year’s performance results for the three divisions. Your financial analysis should include a segmented income statement for Pleasanton Studios, as well as the current annual ROI, residual income and EVA for the three divisions.

b. Evaluate Entertainment’s decision not to invest in the new animation studio (i.e., was the decision appropriate and in the best interests of Pleasanton Studios), including the appropriate financial analyses to support your evaluation.

c. Evaluate the validity of Reyna Imanah’s complaint regarding her evaluated performance. Explain why it is (or is not valid), and what further information would be necessary.

d. Provide a recommendation on whether to close the Parks division, including all necessary financial analyses.

Reply to this post in at least 500 word. Discuss what you agreed and disagree with

The discussion board question for this week is ethical relativism correct. To understand the question, you first must know what definition of ethical relativism. According to dictionary.com, "Ethical relativism is the belief that nothing is objectively right or wrong and that the definition of right or wrong depends on the prevailing view of a particular individual, culture, or historical period". An example of ethical relativism would be homosexuality. Many countries are against homosexuality and there are countries that support them. The United States of America are one of the many countries that continue to create strides for the lesbian, gay, bisexual, and transgender Community (LGBT). Uganda is one of the many countries that are against homosexuality. They have an Anti-Homosexuality Act, which was signed in 2014 that will grant you with life in prison or the death penalty

The United States has begun to grant rights to the lesbian, gay, bisexual, and transgender (LGBT) community in 2003 after the United States Supreme Court ruling in Lawrence v. Texas. Back in 1973 Texas had a law that homosexual contact was a criminal act. The police were sent to the home of Mr. Lawrence to responds to a call about weapons. When the police entered the home, they caught Mr. Lawrence and another man in a sexual act. This court ruling found that same sex sodomy is a violation of right to privacy. This day has become the foundation of many LGBT right to come. On June 26, 2015 same sex marriage was established in all fifty states.  

Uganda is one of the many countries in Africa that does not believe in Homosexuality rights. The country of Uganda has signed an Anti-Homosexuality act in 2014 with strict punishments if caught or accused of homosexual acts.  These countries ethical relativism toward homosexuality is totally different than what the United States of America has. Uganda ethical relativism towards this issue is that homosexuality is wrong and has no place in their country. Some of the penalties of getting caught is life in jail or the death penalty. Which is the main reason behind many of the people fleeing the country due to this act in Kenya where being a part of the lesbian, gay, bisexual, and transgender (LGBT) Community is more acceptable.  

I believe ethical relativism is correct There are multiple countries with different ways of living. Some countries believe in polygamy and other countries believe that it is wrong. We may live on the same earth, but we do not live under the same rules. In Nigeria the age of sexual consent is eleven and in the state of Virginia the age of consent is eighteen. According to girlsnotbrides.org forty-four percent of the young women are married before eighteen and seventeen percent married before fifth-teen.  

It is very easy to understand why some of my classmates may choose the ethical relativism is incorrect. A person's culture plays a large part in ethical relativism, but there are many things that are wrong even though they are culture norms. Such as in the sexual consent age in Nigeria. In my eyes at the age of eleven I do not believe a child can give consent.

Reference List  

Britton, Bianca. 2017. “Kasha Nabagesera: The Face of Uganda's LGBT Movement.” CNN. Cable News Network. March 7. https://www.cnn.com/2017/03/05/africa/her-kasha-jacqueline-nabagesera-lgbt-campaigner/index.html.

“The Supreme Court . The Future of the Court . Landmark Cases . Lawrence v. Texas (2003) | PBS.” 2018. THIRTEEN - MEDIA WITH IMPACT. Accessed June 4. https://www.thirteen.org/wnet/supremecourt/future/landmark_lawrence.html.

Blanchard, Bobby. 2017. “Why Does the Texas Criminal Code Still Ban ‘Homosexual Conduct’?” The Texas Tribune. Texas Tribune. March 27. https://www.texastribune.org/2017/03/27/why-does-texas-criminal-code-still-ban-homosexual-conduct/.

Girls Not Brides. 2018. “Nigeria - Child Marriage Around The World. Girls Not Brides.” Girls Not Brides. Accessed June 4. https://www.girlsnotbrides.org/child-marriage/nigeria/.