¶ … 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 Stratton Township Park

Annual Financial Budget

Incomes

Item

Description

Description

Amount

Amount

Parking fees

Green fee

Caddy

Admission Fees

Annual Fee

Annual Fee

Swimming

Swimming Feeds

Nature

Individual Fee

Group Fee

Concession fee

Five stands

Nineteenth Hole

Swimming Hole

Swimming hole snack bar

300*3.5*130

136,500

Nature visitor

312,000

Golfers

728,000

Concert Fees

Concert

100,000

Stand expense

25,000

Gross Income

2,592,260

Expenses

80,000

Full Time Employee Salaries

Park Manager

45,000

Assistant Manager

350,000

Management Staff

35% * (80,000 + 45,000 + 350,000)

166,250

Benefits for employees

Total

641,250

General Park Operations

Depreciation for the year

450,000

Depreciation costs

Central Supply and utility

110,000

Supplies and Utility

Total

560,000

$50 * 130 days *10 caddies

65,000

Golf Course Operations

Caddies

2 season schedulers

20,000

Reservations and Scheduling

3 check-in staff members

24,000

Check-in Desk

Parts and Supply

60,000

Seasonal Cost for Parts and Supplies

Fuel and Utility

60,000

Total Fuel and Utility Costs

Total

229,000

160,000

Depreciation Expenses

Depreciation for the year

13*1,000

13,000

Pool Manager

Salary

12*2,000

26,000

Depreciation Pool Expense

14,560

Head Lifeguards

54,600

Six other life guards

4,550

Chemicals

21,385

Electricity

30,550

School donation

50*60

3,000

Concession Expenses

Depreciation

60,000

Maintenance

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
In this aspect, the calculation made is for the break-even fee amounts for the Golf course and pool. It is known that at the breakeven point, the total revenue (TR) amount is equivalent to the total expense or total cost (TC) (Brigham and Ehrhardt, 2013). In this case, there are the fixed revenues and variable revenues that do not have any relation to the green fees or the pool prices. This revenue will be designated as separate variable revenue (SVR). This revenue will be taken into account within the calculations:

Total Revenue = Total Cost (Weygandt et al., 2008).

This equation can be rewritten as follows

Variable revenue (VR) * Quantity + separate variable revenue (SVR) + Fixed Revenue (FR) = Fixed Cost (FC) + Variable Cost (VC) * Quantity

By subtracting SVR as well as FR from both of the sides of the equation and making rearrangement, the equation becomes:

VR * Q = (FC -- FR) + (VC * Q -- SVR)

By dividing both sides of the equation by Q, the equation changes and becomes

VR = (FC -- FR) + (VC * Q -- SVR) / Q

Fixed Expenses

Full-time Park Manager

80,000

Assistant Manager

45,000

Maintenance Staff

350,000

Total Depreciation

450,000

925,000

Variable Costs

Central Supply and Utility

10,000

Utility and Fuel Costs

100,000

110,000

Variable Revenue

Parking Fees

240,000

Green fee

507,000

Caddie

74,880

821,880

Sales = Fixed Costs + Variable Costs

2,592,260 = 925,000 + 110,000 x x = $15.16

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?

They cannot realistically charge these fees to the park users. There are a number of consequences that would come about by increasing the fees not just economically, but politically as well as in a public relations manner. For starters, these increased fees would have a disparaging impact on the park. This is because raising fees would imply a loss of consumers due to greater expenses. In addition, politically, the park can also place…