Case 5: Cases for

Management Decision
Making
Review by:
Azizi Mohd Noor
Faizal Abdullah
Fauziah Othman
Mohd. Effendi Amran
 Q1:
Goals

Provide the club a

Continue to get Give back to the
presence in
better each year community
community

Break Even (1st year) & $5k By providing scholarships, Gain exposure through public radio
following yr and annual making donations to a good announcements, and advertising
community event cause and volunteering posters throughout the community

By providing Entertainment will be spreaded by

Goals for future
entertainment to the patrons and tickets sales will increase
fundraising event
public next

To have standard in By filtering back the extra Develop public trust and
measuring the progress of fund raised by the rodeo communication for reactive
activities into community strategy
Q2:
Break Even (1st year) &
$5k following yr and • GOAL
annual community
event

They invested their

time, effort and money
into an fundraiser that
will bring the
community together

which will continue to

grow each year and This
event will eventually be
able to fulfil their goals
and objectives
Q3:
Jonathan believes the rodeo will
have a positive impact in the long • Yes
run, even though it took a loss the
first year.

The rodeo will be a profitable

investment in the future because it
serves as an entertaining event.
The club offers a family-oriented
occasion for the community

Not only he could see it becoming

profitable, but also was looking at it
from the perspective that it was
benefiting the company and that, in
the long run, would be something
that the club would be known for
Q4:
1. The expenditure is too high (double) compare to ticket sales
2. Fixed cost can be improved by better management of expenditure
 Q5: Hi-Low method
Contestant Total Cost ($)
Friday 68 998
Saturday 96 1243
Sunday 83 1100

Change in Costs 1243 - 998

= = $ 8.75
High minus Low 96 - 68

Activity Level
High Low
Total cost $1243 $998
Less: Variable costs
96 x $8.75 $840 $595
68 x $8.75
Total Fixed Cost $403 $403
Q6:
1. Attract more sponsorship
2. Improve marketing strategies to more sales
3. Improve expenses
4. Better gate control
5. Organise side event such as “booth rental for souvenir and gift”
6. Attract the well-known performer for Rodeo
Q7: Break-even point in dollar
Variable
Sales - Costs = Fixed Costs + Net Income

XQ - 0.4XQ = 51,000 + 0

0.96XQ = 51,000

XQ = 53,125

Break even point $ 53,125

Sponsor $ 25,600
Break even in dollar for selling tickets $ 27,525
 Q8:
a) calculate dollar ticket sales as target profit $ 6,000

Fixed cost + Target profit 51,000 + 6,000

= = 59,375
Contribution margin 96%
ratio

Break-even in dollar $ 59,375

Sponsors $ 25,600
Break even in dollar for selling tickets $ 33,775
 Q8:
a) calculate dollar ticket sales as target profit $ 12,000

Fixed cost + Target profit 51,000 + 12,000

= = 65,625
Contribution margin 96%
ratio

Break-even in dollar $ 65,625

Sponsors $ 25,600
Break even in dollar for selling tickets $ 40,025
Q9:
Break-even in dollar for $6,000 $3,3775

Ticket Friday $898

Saturday $1,663
Sunday $769
$3,330

Receipt from ticket sales $2,8971

Avg price per ticket $8.7

Total ticket to be sell for 3 days $3,882.184
Total ticket to be sell for 1 day $1,294.061
Q10:
Receipts
Contributions from sponsors $25,600
Receipts from ticket sales (#8b) $40,025
Total cash receipts $65,625

Expenses
Livestock contractor $26,000
Prize money $21,000 $21,000
Sanctioning fees 925 $925
Entertainment 859 $859
Judging fees 750 $750
Rent 600 $600
Utilities 300 $300
Sponsor signs for arena (See CalCulation) * $2,212
Insurance 600 $600
Ticket printing = ($1050 x 50%) $525
Sand for arena 300 $300
Miscellaneous fixed costs 100 $100

Total expenses 54,171

Net income $11,454

* Percentage of Sponsorship Increase = (26500 - 22000)/25600 x 100 = 16.3%

Percentage of Sponsor sign increase from previous year= 1900 X 16.3% = $2212
Q11:
Ans: not relevant, because the cost is Shelly personal cost
 Q12:

Net Income
Disagree Agree Increase (Decrease)

Total Catering Cost $3,341.00 $0.00 $3,341.00

Opprotunity Cost
(Sponsor) $0.00 $1,200.00 $1,200.00
Sign Cost (2 x $48) -
Sunk Cost $96.00 $96.00 $0.00
Net Income $2,141.00