For-Profit

20% of marketing expenses are fixed; the rest are variable; all other expenses are fixed

Next year they plan to double their fixed marketing expenses and as a result will increase ticket sales by 25%.

Gift shop sales vary directly with ticket sales; gift shop COGS is 50% of sales but is expected to grow to 55% of sales.

For-Profit Dinosour Museum
Income Statement
	This Yr	Next Yr Budget	Reason
Ticket sales	$600,000
Gift shop sales	200,000
Total sales	800,000
Salaries & benefits	100,000
Gift shop COGS	100,000
Marketing	100,000
Maintenance	90,000
Skeleton depreciation	20,000
Building lease	20,000
Utilities	40,000
Interest on debt	40,000
Total expense	510,000
Before tax income	290,000
Tax @ 40%	(116,000)	(165,000)
After-tax income	174,000	247,500

• complete next year's budgeted figures for each entity within the same Excel worksheet (yellow cells)
• include your reasoning for most of the budgeted figures (green cells)

Because of a bad recession, government grants were not cut by 50% but are eliminated completely for next year's budget and fundraising effortsdespite an increase in expensesdid not improve at all.