Planning and control, feedback. (15-20 minutes) In April 2000, Brangere Saunier, editor of The European Sporting News

Planning and control, feedback. (15-20 minutes) In April 2000, Bérangeére Saunier, editor of The European Sporting News (ESN), decides to reduce the price per newspaper from EUR 0.70 in April 2000 to EUR 0.50 starting 1 May 2000. Actual paid circulation in April is 7.5 million

(250,000 per day X 30 days). Saunier estimates that the EUR 0.20 price reduction would increase paid circulation in May to 12.4 million (400,000 x 31 days). The actual May circulation turns out to be 13,640,000

(440,000 X 31 days). Assume that one goal of ESN is to increase operating profit. The budgeted increase in circulation would enable ESN to charge higher advertising rates in later months of 2000 if those budgeted gains actually occur. The actual price paid in May 2000 was the budgeted EUR 0.50 per newspaper.

REQUIRED 1. Distinguish between planning and control at ESN, giving an example of each.

2. Prepare a newspaper revenue performance report for ESN for May 2000 showing the actual results, budgeted amounts, and the variance.

3. Give two types of action Saunier might take based on feedback on the May 2000 circulation revenue. lo2