Prepare a revised budget for the stratton township park
Financial Management
The Stratton Township Park” on pages 308-311 in your course textbook. Complete
questions 1-5 listed below and found on pages 310-311 using the information
found in the case study and any of the required reading. Compile your answers
in a Word document, and upload it in Blackboard.
Question 1:
Prepare an annual program budget for the Stratton Township Park including golf
operations; the pool; concerts; other park activities including tours, nature
visitors, and general concessions; and administrative costs. Show the line-
item details for each function by natural account and summarize the budget for
the park as a whole.
Because of the current fiscal situation, the Stratton Township needs to reduce
its operating costs. As usual, the park is on the list of targeted operations.
As the finance director for the township, you have been asked to work with the
park’s manager to explore possible options.
Question 2:
Based on the information in the budget, find the break-even green fees for the
golf course and the break-even admissions charges for the pool. You may assume
that the volume of users will not change with increases in pricing. You may
also assume that the course will operate for a full 130 days.
a) Do both break even analyses based on the cost of delivering services with
and without the allocated management salaries.
b) Do you think the park can realistically charge these fees to park users?
What might the consequences of raising fees be economically, politically, and
in a public relations sense?
Question 3:
The park manager wants to know whether it makes sense to shut down one or more
of the operations at the Stratton Township Park. Determine the impact of
shutting down the golf course, the pool, the concert series, and the tours,
and show the overall marginal impact of making each of these changes. Be sure
to include all marginal revenues and all marginal expenses in your
calculations.
Question 4:
After completing these analyses, the manager has decided to recommend three
changes to the Park’s budget.
First, he plans to increase green fees for golf to $5 above the break-even
price excluding allocated management costs and rounded to the next highest
multiple of $.50. Since competitive private clubs in the region cost $100 or
more for a round of golf, he does not believe that an increase in price will
result in a decline in the number of golfers using the course.
Second, he wants to raise pool admission charges to $4.50. Given the
demographics of those who use the pool, he believes that raising prices by
$1.00 will result in a 5% drop in attendance.
Third, he wants to eliminate three of the concerts the township had planned
for the next year.
Prepare a revised budget for the Stratton Township Park reflecting these
changes. Will these budget modifications meet the township’s goal of reducing
the subsidy it would have given to the park in the next fiscal year by 20%?
Question 5:
After receiving your analysis of the impact of eliminating the concerts and
raising green fees and pool admission charges, the park manager has asked you
to come up with some additional proposals for meeting the township’s subsidy
reduction goal. What would you recommend?
Assignment 2
Question 1
Donations in cash are easy to measure. What is the treatment that not-for-
profit organizations use for donated goods and services?
Question 2
How does the accounting industry define a not-for-profit organization and a
voluntary health and welfare organization (VHWO)?
Question 3
Distinguish between the way investor owned and not-for-profit healthcare
organizations treat investments.
Question 4
To what extent do not-for-profit organizations have the ability to choose
among the following:
a. using depreciation,
b. ignoring depreciation,
c. maintaining building and equipment on the balance sheet at their original
cost,
d. showing such assets at their market value,or
e. completely charging such assets such as expenses in the year acquired?
