The document discusses the revenue and expenditure variance analysis for Kalamazoo Zoo. The actual revenue and expenditure were both unfavorable compared to the budget. For ticket revenue, the quantity variance was unfavorable while the price variance was favorable. For animal food expenditure, both the quantity and price variances were unfavorable compared to the budget. Several options are proposed to address the budget issues, including increasing ticket prices, reducing the number of animals, and firing an assistant zookeeper.
The document discusses the revenue and expenditure variance analysis for Kalamazoo Zoo. The actual revenue and expenditure were both unfavorable compared to the budget. For ticket revenue, the quantity variance was unfavorable while the price variance was favorable. For animal food expenditure, both the quantity and price variances were unfavorable compared to the budget. Several options are proposed to address the budget issues, including increasing ticket prices, reducing the number of animals, and firing an assistant zookeeper.
The document discusses the revenue and expenditure variance analysis for Kalamazoo Zoo. The actual revenue and expenditure were both unfavorable compared to the budget. For ticket revenue, the quantity variance was unfavorable while the price variance was favorable. For animal food expenditure, both the quantity and price variances were unfavorable compared to the budget. Several options are proposed to address the budget issues, including increasing ticket prices, reducing the number of animals, and firing an assistant zookeeper.
The document discusses the revenue and expenditure variance analysis for Kalamazoo Zoo. The actual revenue and expenditure were both unfavorable compared to the budget. For ticket revenue, the quantity variance was unfavorable while the price variance was favorable. For animal food expenditure, both the quantity and price variances were unfavorable compared to the budget. Several options are proposed to address the budget issues, including increasing ticket prices, reducing the number of animals, and firing an assistant zookeeper.
Both Variances are unfavourable. The zoo under budgeted
both the quantity and price for animal food expenditure.
4 5a) Increase ticket prices to $15.00. Rory believes this might reduce the number of visitors to the Zoo by 20%.Therefore, increasing the ticket price will still resort in a loss of revenues of $80,000. Although you could cut back in staff costs or overtime costs with less visitors.
Revenues Actual Budget Variance Favorable/Unfavorable
Tickets $120,000 $100,000 $20,000 Favorable
License $100,000 $100,000
Donations $50,000 $50,000
Grants $400,000 $400,000
Subsidies $100,000 $200,000 -$100,000 Unfavorable
Total revenues $770,000 $850,000 -$80,000 Unfavorable
5 5 b) Reduce the number of animals to 100 by finding other host programs. There would be a one-time cost of transportation of $1000 each.Therefore, it is hard to calculate exactly how much they could save because you don’t know how long they spend on each animal (cleaning their cages and feeding them) and how much overtime they could cut out of overtime but I’m sure this could help them break even by bringing the overtime costs back into budget potentially.
Expenditures Actual Budget Variance Favorable/Unfavorable
Salaries $80,000 $80,000
Assistant Keeper $100,000 $100,000
Animal Handlers $100,000 $100,000
Security $50,000 $50,000
Fringe Benefits $130,000 $130,000
Food $300,000 $360,000 $60,000 Favorable
Overtime $100,000 $100,000
Utilities $50,000 $50,000
Transportation $100,000 $100,000
Host Program $20,000 $0 -$20,000 Unfavorable
Total Expenditures $1,030,000 $1,070,000 $40,000 Favorable 6
5 c)Fire one of the two assistant zookeepers . This will require a severance payment equal to 10% of the annual salary and a payment of full fringe benefits for 6 months.By getting rid of the zookeeper this may result in more overtime pay for the other zookeepers and may cause it to be more expensive.
Expenditures Actual Budget Variance Favorable/Unfavorable
