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Review Case 8.32 in your textbook. Using the questions provided as a guide, disc
Review Case 8.32 in your textbook. Using the questions provided as a guide, discuss your recommendation(s) regarding what the company should do about the conference. Support your recommendation(s) with calculations based on the data provided.
To participate in follow-up discussion, ask questions and post comments regarding classmates’ posts, or respond to follow-up questions posted by the instructor.
Please include proper citations in your discussion post. Points will be deducted if proper citations are not used. BEENA RESPONSE Hello Sir and Class,
Discussion
a) The options available include undertaking it as planned, rescheduling, or canceling it. b) Proforma Income Statements
Go through
Postponing to a future date
Canceling
Total number of attendees
10
100
0
Registration fee per attendee
695
695 for 90% and 595 for 10%
Revenue
6950
68500
Less Costs
Meals
1500
15000
0
Conference materials
750
7500
0
Fixed Costs
Advertising
6000
7500
6000
Rent
9500
4500
10000
Equipment
500
500
0
Speakers fees:
Newton
600
600
Smith
2000
2000
Townsley
4000
4000
1000
Travel Expenses
Newton
200
200
Smith
800
900
800
Townsley
1000
Compton
200
200
Net Income
(-20200)
25800
(-17800)
c) Adjusted Income Statement
Go through
Postponing to a future date
Canceling
Total number of attendees
10
100
0
Registration fee per attendee
695
695 for 90% and 595 for 10%
Revenue
6950
68500
Less Costs
Meals
1500
15000
0
Conference materials
750
7500
0
Fixed Costs
Advertising
1500
Rent
9500
4500
10000
Equipment
500
500
0
Speakers fees:
Newton
600
600
Smith
2000
2000
Townsley
3000
3000
Travel Expenses
Newton
200
200
Smith
100
Townsley
1000
Compton
200
200
Net Income
(-12300)
33400
(-10,000)
c) If the conference is held as scheduled, no additional marketing costs will have to be incurred. Not canceling the reserved venue will also save money, and some speakers will not incur additional travel expenses. On the downside, this option also means fewer people will be at the conference, and additional rent expenses will have to be incurred.
d) Canceling the event does not yield significant gains. Instead, a $10,000 cancellation fee will have to be incurred, which will represent a loss.
e) If the conference is rescheduled, the cancellation fee will not be incurred, and there will be enough attendees to avoid the $5,000 penalty. On the downside, some speakers will need additional travel costs to make it on time, and additional fliers will also need to be made.
f) In the short term, the conference provides Flagstone with many insights on how to manage such events in the future if costs are to be kept down. In the long term, the company stands to gain from the information gained on how to organize such conferences. David Durenreplied toJulia CaddowMar 8, 2024, 4:50 PM
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Julia and Beena, thanks for your response to the case. They have 3 options. Option 1: Hold conference as planned with 10 attendees currently registered. Option 2: Cancel the conference and return conference fees
If you reschedule conference for Dec. 8th and 9th. What cost would you avoid and which would you still have to pay?
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