WebNews.co.uk is an Internet company. It offers subscribers multiple online services ranging from an annotated TV guide
Question:
¢ Monthly fees from subscribers. Recent data are:
¢ Banner advertising fees from companies advertising on WebNews.co.uk page sites. Recent data are:
Month/Year Advertising revenues
June 2006..................................... £400 988
December 2006................................ £833 158
June 2007...................................... £861 034
December 2007............................... £1 478 072
June 2008...................................... £2 916 962
The following decisions were made in the June to October 2008 period:
a. June 2008. Decision to raise the monthly subscription fee from £19.95 per month in June 2008 to £24.95 per month in July 2008. The £19.95 fee first applied in December 2006.
b. June 2008. Decision to inform existing subscribers that the July 2008 subscription fee would be £24.95.
c. July 2008. Decision to upgrade the content of its online services and to offer better Internet mail services.
d. October 2008. Demotion of manager of marketing after significant slowing of subscriber growth in accounts and revenues. Results include:
Budgeted amounts (set in June 2008) for the number of subscribers were 140 000 for July 2008, 150 000 for August 2008, and 160 000 for September 2008.
e. October 2008. Decision to reduce the monthly subscription fee from £24.95 per month in September 2008 to £21.95 in October 2008.
Required
1. Distinguish between planning decisions and control decisions at WebNews.co.uk.
2. Classify each of the decisions a-e as a planning or a control decision.
Step by Step Answer:
Management and Cost Accounting
ISBN: 978-1405888202
4th edition
Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster