Alltel Pavilion Case

In: Business and Management

Submitted By akeebler3
Words 425
Pages 2
The next question is, what is the maximum fixed fee that you can pay the KSFB Allstars if the you to earn $45,000 of operating income after taxes with a tax rate of 40% and the show has an average ticket price of $22.12 and the show is expected to draw 6,000 paying ticketholders. First, we find the operating income before taxes. You find this by taking the desired ending operating income by one minus the tax rate. In this case, the total operating income you want is $75,000. By plugging the numbers into the formula provided, you find that the highest fixed fee you can allow is $59,630. This is due to the low ticket sales. 45,000/(1-.4) = 75,000 | EQUATION: | 37.03 * Q + (10.04 * .25Q) = Fixed costs + Fixed fee + Desired ending Operating income | 37.03 * 6,000 + (10.04 * .25) * 6,000 = 102,610 + X +75,000 | X = $59,630 | Next, we need to find the maximum fixed fee that you can pay the KFBS Allstars assuming you want to earn $45,000 after 40% tax and you expect the show to have an average ticket price of $22.12 and the show is expected to sell out. Like the last example, we find the desired operating income. $45,000 divided by 60% is equal to $75,000. Now we can use our equation again. Plugging in the numbers, we find the answer is $428,040. 45,000/(1-.4) = 75,000 | Equation: | 37.03 * Q + (10.04 * .25Q) = Fixed costs + Fixed fee + Desired ending Operating income | 37.03 * 15,000 + 10.04 * 5,000 = 102,610 + X +75,000 | X = 428,040 |

Now we want find the max per capita fee that you can pay the KFBS Allstars if you want to earn $180,000 after 40% tax from an average ticket price of $22.12 per ticket, and the show is expected to be a sellout. Once again, this problem is similar to the two above it. You find the operating income before taxes, $300,000. Then you plug the numbers into the formula, only this time the comp tickets are only 2.5% of…...

Similar Documents

Alltel

...1) The competitive strategy of the ALLTEL Pavilion is largely focused on differentiation. With no substantial competitors in the geographic region, they are looking to create an “experience” for the audience and thus maintain the sustainability of the venue. They do this primarily through solid Marketing efforts. They are focused on the making the venue and each event as profitable as possible, by making it as highly visible as possible. Working within an established marketing budget of $20,000 per event, the team analyzes demographics, options, and potential ROI in order to make decisions about how to spend this money. Looking beyond each individual event, they are also looking to build visibility for the venue.  However, in this case the strategy of differentiation should not work in a vacuum. Many experienced concert attendees may feel that the venue makes like difference to the experience that the performer brings. It is also wise to consider some cost leader strategies as well. This could be done through a more thorough look at ALLTEL’s SWOT analysis.   They have an identified strength in how best to utilize available marketing funds and appear to have a solid process in place for overall execution at the events. However, have they adequately analyzed their opportunities? How many events do they secure each year? Are there substantial gaps? Would a marketing spend that exceeds $20,000 yield a greater return with certain events? Are the present ancillary vendors......

Words: 269 - Pages: 2

Disney Case Study

...ULMS 157 Recruitment, Selection and Performance Management at Epcot Theme Park Introduction This case study examines the concept and management of performance in organizations. In organization and management studies the word performance has two meanings (Fineman, Sims and Gabriel, 2005). On the one hand it simply refers to how well individuals are doing the tasks, duties and job responsibilities assigned to them, whether or not they are achieving output targets and productivity goals, product and service quality standards and meeting customer expectations. It is also refers to personal performance, how well a person is doing in achieving the goals they set for themselves. On the other hand the word performance also relates to how people at work conduct or, more specifically, present themselves to others; how they interact with fellow employees, management, clients, customers, the general public, and so on. In this context the concept of performance takes on a rather different meaning. It refers to how everyday behaviour in organizations is about ‘putting on a performance’. In recent years this latter use of the term ‘performance’ has become increasingly popular in organizational and management studies, and is widely used to illustrate how the nature of everyday behaviour and social interaction at work - verbal and non-verbal communication, such as greetings gestures, posture, etc. - are essentially performances. ’The presentation of self in everyday life’ (Goffman, 1959:...

Words: 7851 - Pages: 32

Alltel

...The Forest Hill Paper Company is a thriving company, however, there are ways the company can improve its product cost allocation, and, thus, its profitability. After performing a thorough product cost analysis of the company, we, as the hired consultants of the company, have come up with a few recommendations on how to increase its efficiency and enhance the organization’s success. First, as already mentioned, the company is using the simple-costing method for its product allocation, and, therefore, inadvertently misallocates its product costs for specific grades. Instead of spreading the costs uniformly to all grades using the material costs as a cost driver, the company should use the activity-based costing system to allocate its product costs. That way, the cost of each of the grades will be allocated based on how much activity (grade changes, slitting) it actually used. Moreover, the company will be able to assess the profitability of each of its grades more accurately. Second, as seen in our product cost analysis, we calculated the profit margins of each of the four grades and determined their profitability. The company is overcosting product D and undercosting products A,B, and C. Moreover, product B has a negative profit margin, therefore, we suggest that the company drops this product. By dropping this product, the company will incur less in grade change costs, which will, consequently, increase its profitability. Also, as product D has the highest profit......

Words: 352 - Pages: 2

Verizon & Alltel Merger

...2013, p. 3). Upon entering into an agreement to acquire Alltel, Verizon had to meet some conditions of the acquisition. Verizon had to divest overlapping wireless properties in 105 operating markets in twenty-four states. In May of 2009 Verizon entered into an agreement with AT&T Mobility to acquire seventy-nine of these properties for $2.4 billion. Verizon also entered into an agreement with Atlantic Tele-Network in June 2009, to acquire the remaining twenty-six properties (History of Verizon, 2013). Verizon Wireless launched its 4G LTE (fourth-generation Long Term Evolution) Mobile Broadband network in December 2010. This is the fastest and most advanced 4G network in the United States. This 4G LTE launch was in 38 major metropolitan areas which covered one-third of all Americans and also in more than sixty commercial airports. By January 2011, Verizon Wireless proclaimed that it would expand its 4G LTE network to an additional one hundred and forty markets by the end of 2011. As of the end of 2012, Verizon’s 4G LTE service was available to close to eighty-nine percent of the United States population in 476 markets (History of Verizon, 2013). History of Alltel Alltel was originally Allied Telephone Company in 1943. They were privately owned and after their 1983 merger with Mid-Continent Telephone Company, became the fifth largest local telephone company located within the United States, under the name Alltel Corporation. Around this time, AT&T which dominated the......

Words: 3107 - Pages: 13

The Mystery Pavilion

...The mystery pavilion The mystery pavilion, which is now located at Tandi Park in Shulin District,was registered as a historic building in April 2002. Earlier,the city government had just fininshed the restoration project in 2010. Residents are also encouraged to visit this precious cultural heritage. The set up of the civil mystery pavilions was originally used to revere the Chinese inventer-Cangjie.People later developed the meaning into a form--- something religious like paper made to resemble money and burned as an offering to the dead. In ancient times,people set the pavilions near the city walls,schools,and streets,they collected the paper in the furnace and burnt it into dust,and then called it “the mystery”. After a while,they then spread the dust,which was called “send the mystery”. All the series of motions were used to pray for better academic performance or fame like a social stand. If you want to take a stroll in the evening,there is lighting equipment around the pavilion; also, it provides five languages of audio tour service which allow the public more easily to get to know the historic value and the backgrounds of the heritage. Besides, there’s a “painted mandarin jacket ” in the pavilion ,people can write down their wishes in the cards and hang them on the jacket. All in all, the pavilion is a combination of cultural heritage as well as the art of architecture. Next time when you come to Shulin, don’t forget there’s a 138 years heritage waiting for you to...

Words: 264 - Pages: 2

Mies Van Der Rohe's German Pavilion

...Mies’s German Pavilion as an Expression of Modernism Constructed for the International Exhibition of 1929, Mies van der Rohe’s German Pavilion at Barcelona was designed “to represent Germany’s openness, liberality, modernity and internationalism” at the conclusion of World War I. With its logical free plan, glass and marble walls, steel supports and lack of ornamentation, it embodied the principles of architectural modernism. An object of simple serenity for those living in the perils of a chaotic post-war nation, the structure provided an opportunity for reflection to those seeking a new national direction. The pavilion’s modernism was perhaps best exemplified through its technique. It “consisted of a rectangular slab roof supported by steel columns, beneath which free-standing planes of Roman travertine, marble, onyx and glass of various hues were placed to create the feeling of space beyond.” Noted for its austerity, the lack of ornamentation signaled the rejection of a corrupt imperial regime and the classical structures associated with it. Mies instead intended to develop a new form of modern architecture appropriate for an impending industrial democracy. For it was his aesthetic belief that “architectural beauty resides in the simple, spare, almost chaste execution of a logical system.” “The boldest contribution of orthodox modern architecture was the development of what has been called ‘flowing space’…This kind of space produced an architecture of related...

Words: 725 - Pages: 3

Case to Case

...CASE STUDY 2 I. THE ARALIN TEACHER Mrs. Boots De Vola was assigned to teach the first section in third year level. She assumed that she is an effective and efficient teacher in Araling Panlipunan because of that. There are many teachers qualified and much deserving to teach the star section. Now, the students are complaining of the expenses regarding projects, special projects and the way she behave in classroom. II. HISTORY AND BACKGROUND OF THE FACTS Mrs. Boots De Vola have underwent the process of being LSB teacher, PSB teacher, before she was declared as regular teacher in Banana National High School. It has been five years that she handled Aralin in section one. There are congruency on each year complaint but since the students are afraid of failing her subject they remained quiet. I seldom hear news about her projects and the money she collected from her advisory class. Every single mistake has an specified amount to be collected as fine, but the students don’t know where these money will be spent. Another concern about Mrs. Boots De Vola is the way she handled and treated her students. She always nag and shout to students, for her it’s the way of disciplining her students. Some of the students chose to dropped schooling because they felt being degraded and they do not have money for everyday fine. Lately, a mother asked her about the special project of her son amounting one hundred thirty pesos. The project was properly discussed, but we found out that......

Words: 699 - Pages: 3

Alltel Pavilion Report

...accurate budget and negotiating fair and reasonable contracts, the requested CVP analysis was performed. Although ALLTEL is aware the current system for negotiating contracts leads to budgeting troubles, this report details the exact shortcomings and provides recommendations to improve it, including a new system for paying the performing talent. The Pavilion has goals other than making the highest revenue possible, although they are still looking for 5% annual growth. ALLTEL wishes to achieve its desired earnings while maintaining a competitive edge against its competitors in the area. Being the only pavilion with outdoor seating gives it a unique advantage, but it needs to be careful not to underpay its performers or it will drive them away. Looking for a way to budget accurately, a target increase point was set to give a base to work off of in order to develop a formula. This increase point helped to find what price Alltel will break even from, and can further the process to find a price that will bring a profit. Included in the appendix is the formula used to find the break-even point. Modifying this formula can help to calculate the number of tickets that need to be sold, the price of the tickets, or the highest fixed fee that can paid for a show. These numbers vary widely based on the entertainer and the contract type used. Through using this formula, ALLTEL can determine specific numbers needed to earn its desired 5%. This percentage, like all the variables in the......

Words: 1794 - Pages: 8

Case

... Auditing Cases An Interactive Learning Approach FIFTH M F S D E D ITIO N S. B A. B M. G F. P Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Editor in Chief: Donna Battista Acquisitions Editor: Stephanie Wall Editorial Project Manager: Christina Rumbaugh Senior Managing Editor: Cynthia Zonneveld Production Project Manager: Carol O'Rourke Senior Operations Supervisor: Diane Peirano Printer/Binder: BindRite Graphics, Robbinsville Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text. Copyright © 2012, 2009, 2006, 2003, 2000 by Pearson Education, Inc., publishing Prentice Hall. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax your request to 201-236-3290. Many of the designations by manufacturers and sellers to......

Words: 139985 - Pages: 560

Response to“Tomb, Palace and Pavilion: Mughal Gardens and Garden Architecture”

...Started with introducing the dramatic centerpiece of late-Mughal garden pavilion in the VMFA’s South Asian collection as a fragmentary used to carry lots of weight, the curator Doctor. Rice brings the magnificent piece into the sight of contemporary art world by presenting it out of the original context of formal garden setting and apart from the architecture ensemble. It gives the audience the chance to do a structure analysis by looking closely to the white marble surfaces and the refined decoration under the distinct context, differentiating from the original aristocratic garden complex. Doctor. Rice explained the three kinds of gardens briefly in Mughal India, the palace garden, garden for pleasure, and the tomb garden. The magnificent rectangular walled garden was built near riverfront not only to appreciate the beauty of the Mother Nature by including the river as part of the aesthetics, but also to draw out the “plan of assembly”, which Doctor. Rice proposes that the physical or three-dimensional representation of the tomb gardens might be a way for the emperors, especially Akbar, to deifying himself and to build the image of mystic diagram. He also presents the timeline of Mughal Empire, from early Babur, who defeated Muslim of Delhi (Sutan), Humayun’s tomb during the great Mughal period, which the economic changes and artistic innovations took place, to Akbar who built the garden from the ground, which......

Words: 451 - Pages: 2

Alltel Pavilion

...TO: Pam Berg, Manager of the ALLTEL Pavilion FROM: Valentina Golman, Cost Accountant DATE: October 29, 2011 SUBJECT: ALLTEL’s Strategy and CVP Analysis As requested, CVP analysis of the ALLTEL Pavilion has been investigated. The focus of the investigation was on firm’s competitive strategy, operating results, negotiating contract fees with artists, earning budgeted profit goals. Findings: 1. In response to the competitive strategy of the ALLTEL Pavilion * it is noted to be differentiation. The firm positions and distinguishes itself from its competitors by providing high end experience to its customers. The unique value of the product would be: advanced technology, no bad seat in the house, beautiful settings, wonderful atmosphere, outstanding parking and food concession services. * The critical success factors for the Pavilion are being the only outdoor venue in the area, educate parking, excellent up keep, clean facilities, well maintained grounds, customer’s opportunity for reserving VIP (A) seats for the year, advanced technology, following current trends and hiring local, regional and national artists. 2. Below are completed cost-volume-profit analyses. In order to get correct number of tickets that The ALLTEL Pavilion must sell to break even we have to consider two types of customers, in this case paying customers and comp ticket customers, where the second group brings in revenue only for ancillary services. For revenue brake down refer to...

Words: 827 - Pages: 4

Management

...333- ACC Section C The ALLTEL Pavilion Case Strategy and CVP Analysis 1. How would you describe the competitive strategy of the ALLTEL Pavilion? Given the firm's strategy, what are the most important Key Performance Indicators (e.g., quantitative measures) for the Pavilion to track and manage if it is to achieve its goal of continuous annual growth in operating income? ALLTEL Pavilion is operated by SFX Entertainment in an outdoor atmosphere for its customers. ALLTEL attempts to create a competitive advantage as the major outdoor concert venue in the "Triangle" area of North Carolina consisting of Raleigh, Durham, and Chapel Hill. The amphitheater has art-like acoustics and video differentiating the venue with trying to keep costs budgeted for each concert. The Key Performance Indicators are based on advertising media. They have researched on the most effective advertising in each region of the state in order to maximize ticket sales with the least advertising costs, which eventually create profitability. Other items include customer satisfaction, parking, and concessions. 2.) Complete two selected cost-volume-profit analyses for the show illustrated in Exhibit 2, the KFBS Allstars: A. How many tickets must the ALLTEL Pavilion sell to break even? (Hint: don't ignore the possibility that the attendance of Comp ticket holders affects the concert's profitability.). (4:1 sales mix tickets of paying : comp) Break-Even = $0 = 4x($40.08-$3.05) +......

Words: 1616 - Pages: 7

Alltel Pavilion

...EDUCATION Vol. 19, No. 4 November 2004 pp. 555–565 The ALLTEL Pavilion Case: Strategy and CVP Analysis Edward Blocher and Kung H. Chen ABSTRACT: The ALLTEL Pavilion case is intended for the undergraduate management accounting or cost accounting course and the M.B.A. management accounting course. It provides an excellent context in which to examine strategic issues in using cost volume profit (CVP) in a service business. Based on an actual entertainment pavilion, the case develops many factors unique to a service business and illustrates how pavilion management can use CVP analysis to determine which artists to attract and what kinds of contracts to have with these performers. The Pavilion has two types of customers (paying ticket holders and free ticket holders) and earns profits from three types of revenues (ticket revenues, concession revenues, and parking fees). The case requires you to identify the best strategy for different types of artists, conduct cost-volume-profit analyses, consider the strategic issues related to operating leverage and how this affects the choice of performer and contract, and assess pricing strategies. O ne day in early November, Pam Berg, Manager of the ALLTEL Pavilion, was reviewing the operating results for the year just completed in preparation for the executive board meeting the following Friday. While the year ended in the black, she was disappointed that the ALLTEL Pavilion failed to earn the budgeted profit goal.......

Words: 4897 - Pages: 20

Case Case

...Case Analysis - FPL Energy FPL Energy is one of the nation’s leading independent generators of electricity. Dedicated to generating clean energy, 80 % of its capacity is fueled by clean and renewable resources. The United States is the nation with the largest generator of wind energy, and it operates the two largest solar fields in the world. FPL Group, with annual revenues of more than $8 billion, is one of the nation's largest providers of electricity-related services. Its principal subsidiary, Florida Power & Light Company, serves approximately 3.9 million customer accounts in Florida. FPL Energy, LLC, and FPL Group energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. 2. Historical Overview FPL Group is a far different company today than the one Jim Broadhead joined in January of 1989 when he became president and chief executive officer. FPL Group was then engaged in a number of businesses unrelated to its core electric skills, including insurance and financial services, real estate, cable television, and agriculture. The company's principal subsidiary, Florida Power and Light, was considered a well-managed utility with an emphasis on quality. However, the utility's spiraling costs had resulted in electric rates among the highest in the Southeast. Today, FPL Group is nationally known as a high quality, efficient, and customer-driven organization focused on energy-related products and services. With a......

Words: 3471 - Pages: 14

Capital Budgeting Case Question

...Chapter 11 The Basics of Capital Budgeting Integrated Case 11-24 Allied Components Company Basics of Capital Budgeting You recently went to work for Allied Components Company, a supplier of auto repair parts used in the after-market with products from Daimler, Chrysler, Ford, and other automakers. Your boss, the chief financial officer (CFO), has just handed you the estimated cash flows for two proposed projects. Project L involves adding a new item to the firm’s ignition system line; it would take some time to build up the market for this product, so the cash inflows would increase over time. Project S involves an add-on to an existing line, and its cash flows would decrease over time. Both projects have 3-year lives, because Allied is planning to introduce entirely new models after 3 years. Here are the projects’ net cash flows (in thousands of dollars): 0 1 2 3 | | | | Project L -100 10 60 80 Project S -100 70 50 20 Depreciation, salvage values, net working capital requirements, and tax effects are all included in these cash flows. The CFO also made subjective risk assessments of each project, and he concluded that both projects have risk characteristics that are similar to the firm’s average project. Allied’s WACC is 10%. You must determine whether one or both of the projects should be accepted. A. What is capital budgeting? Are there any similarities between a firm’s capital budgeting decisions and an individual’s investment decisions? ...

Words: 3327 - Pages: 14