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Craddock Cup

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Requirements for Written Case Analyses NOTE: Some requirements may seem demanding; however, they facilitate grading and enable papers to be returned in a timely fashion. Remember to put your name on the paper and you may used 2 sided print. 1. Answer the questions in the assignment in order. Number your answers to the questions to make it clear which question you are answering. No introduction or statement of the problem is required. 2. Use Tables and Exhibits to present quantitative analyses. Clearly show all calculations done to arrive at your answers and analysis. Where possible, use Tables and Exhibits to present calculations and quantitative analyses. You will be evaluated on the clarity of the presentation as well as the quality of the analysis. Font in Exhibits must be 10-point or larger; 12 point is preferable. This means the printed font (be careful if you use the “size” command!). 3. Don’t put case exhibits in your written case analysis. 4. Support your assertions with evidence drawn from case facts and your analysis. 5. Calculations are only the beginning of the analysis. You must interpret them and assess their managerial implications and significance for the decisions under discussion. Don’t be misled that your goal is just to solve the accounting problem. While you are expected to solve the accounting problem that is presented to you, don’t just solve the accounting problem; solve the business problem (the big picture) go beyond the obvious. 6. Type an 8 1/2 x 11 cover page which includes your name, case name, and the due date. Do not put your name on any other pages of your paper, including Exhibits. You may use 2 sided print 7....

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...the exclusive use of Y. Zou, 2016. UV1710 Rev. June 17, 2009 THE CRADDOCK CUP Jose Rivaldo shuffled through the papers on his desk and sighed. As the general manager of the Craddock Youth Soccer League (CYSL), Rivaldo was committed to providing highquality soccer activities to boys and girls in the area. In addition to managing regular CYSL operations, Rivaldo was heavily involved in putting on a regional soccer tournament, the Craddock Cup, which brought approximately 32 premier high school soccer teams from throughout the region each May. This year’s tournament, like its predecessors, had been considered a great success by players, their families, and the local community. The weather had been beautiful, the referees had been fair, and the local hotels and restaurants had profited from the influx of people. Nevertheless, Rivaldo knew that the Craddock Cup was in trouble. Tournament expenses continued to rise, while corporate sponsorships remained difficult to obtain. CYSL had founded the Craddock Cup, in part, to fund a field-acquisition program for the league, with the expectation that the tournament would generate at least $6,000 annually toward that goal. Unfortunately, with tournament profits averaging a loss of almost $4,000 a year, CYSL’s board of directors was beginning to express frustration with the lack of profits generated by the Craddock Cup. Rivaldo knew the Craddock Cup was in danger of being canceled, and that he risked losing his job......

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...Memorandum Literature Review: Before a recommendation can be made, it is important to understand the different factors that play a role in your situation. One of the first aspects we analyzed was cost behavior, which is how a specific cost reacts to change in activity levels. We also accounted for relevant costs.  These costs eliminate any unnecessary data that has the potential to complicate the decision-making process for management. Data Analysis: Craddock Cup generates total revenue of $49,840 for 32 teams from registration fees, T-shirts, concessions, soccer clinic, and contributions. It is currently incurring a total expense of $53,538. However, the total irrelevant cost of $3,400 decreases the total expense, which includes the city field rental for $1,200 Rivaldo’s salary of $6,300, and rent expense of $2,700, these costs will be incurred whether CYSL drops or keeps the Craddock cup. As a result, Craddock Cup generates an incremental profit of $6,502. Craddock Cup will generate an additional $10,132 by adding 32 more teams to the tournament. Most sources of revenues will double except for contributions for a total of $85,680. Relevant expenses such as registration with state YSL, hotels, face book, marketing and advertising, and salary remain unchanged. These costs remain unchanged due to recruiters’ interest in only High School teams, and no further plans for marketing and advertising, and no salary increase. However, relevant variable expenses double as...

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...CRADDOCK CUP Laura Regus THE CRADDOCK CUP Mr. Rivaldo: Upon review of the allocations, we have determined that the salary (J. Rivaldo), rent and utilities allocations to the Craddock Cup are irrelevant, as these are sunk costs that will be inquired despite of the tournament. Also, we have noted that the “city field rental” expense should be eliminated, as this is an irrelevant cost that CYSL cannot avoid by cancelling the tournament. Subtracting these costs lets CYSL generate a profit of $6,502.00 (Exhibit 2A). Therefore we recommend that the Craddock Cup be continued. By expanding the tournament to include 32 more teams, CYSL will see an increase in their profits of $2,572 (Exhibit 3A). In order to breakeven with the increases in marketing and advertising, college recruiters and 20 additional face books, the new registration fee should be $350.00 per team. Recommendations Our recommendations upon reviewing the information provided will consist in ways of maximizing your potential profit. First, we recommend that the Craddock Cup is continued and also that you expand to include the additional 32 teams. By doing this, you will be generating a profit of $9,074.00, which will allow you to fund the field-acquisition program and still have spare income. Second, we suggest that you increase the markup of the concessions to 115 percent, which will generate an additional $1,296.00 in revenue. This will not be a dramatic increase for the participants of the tournament, so...

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