Golf World is a 1,000-room luxury resort with swimming pools, tennis courts, three golf courses, and many other resort amenities. The head golf course superintendent, Sandy Green, is responsible for all golf course maintenance and conditioning. Green also has the final say as to whether a particular course is open or closed due to weather conditions and whether players can rent motorized riding golf carts for use on a particular course. If the course is very wet, the golf carts will damage the turf, which Greens Final PDF to printer 258 Chapter 6 zim6455X_ch06_216-279.indd 258 11/20/15 08:30 PM maintenance crew will have to repair. Because she is out on the courses every morning supervising the maintenance crews, she knows the condition of the courses. Wiley Grimes is in charge of the golf cart rentals. His crew maintains the golf cart fleet of more than 200 cars, cleans them, puts oil and gas in them, and repairs minor damage. He also is responsible for leasing the carts from the manufacturer, including the terms of the lease, the number of carts to lease, and the choice of cart vendor. When guests arrive at the golf course to play, they pay greens fees to play and a cart fee if they wish to use a cart. If they do not wish to rent a cart, they pay only the greens fee and walk the course. Grimes and Green manage separate profit centers. The golf cart profit centers revenue is composed of the fees collected from the carts. The golf course profit centers revenue is from the greens fees collected. When the results from April were reviewed, golf cart operating profits were only 49 percent of budget. Wiley argued that the poor results were due to the unusually heavy rains in April. He complained that there were several days when, though only a few areas of the course were wet, the entire course was closed to carts because the grounds crew was too busy to rope off these areas. To better analyze the performance of the golf cart profit center, the controllers office recently implemented a flexible budget based on the number of cart rentals:a. Evaluate the performance of the golf cart profit center for the month of April.

b. What are the advantages and disadvantages of the controllers new budgeting system?

c. What additional recommendations would you make regarding the operations of Golf World?

** PLEASE DO NOT RECYCLE ANSWERS PREVIOUSLY POSTED ON CHEGG**

GOLF WORLD Golf Cart Profit Center Operating ResultsApril Static Budget Actual Results Variance from Static Budget Flexible Budget Variance from Flexible Budget Number of cart rentals Revenues (@ $25/cart) Labor (fixed cost) Gas and oil (@ $1/rental) Cart lease (fixed cost) Operating profit 6,000 4,000 $150,000 $100,000 7,000 7,200 6,000 4,900 40,000 40,000 $ 97,000 $ 47,900 2,000 $50,000U 200U 1,100F 4,000 $100,000 7,000 4,000 40,000 0 0 200U 900U 0 $49,100U $ 49,000 $1,100U NOTE: F= Favorable; U = Unfavorable. Required: a. Evaluate the performance of the golf cart profit center for the month of April. b. What are the advantages and disadvantages of the controller's new budgeting system? c. What additional recommendations would you make regarding the operations of Golf World