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Annie Smith Dance Center Case Summary

Satisfactory Essays
A cost-volume-profit analysis was conducted on the yearly sales for the Annie Smith Dance Center; in order to give a better understanding of the company’s profits. An income statement was provided to show the breakdown of each concert’s costs and profits. This insight should give you an idea(s) on how to grow the company. There are several recommendations included that suggest ways to implement this information and, ultimately, increase profits. Company Performance Upon calculation of all the numbers, it was determined that the company gained an operating profit of $94,500. The company’s biggest expense was the general administrative and operating costs, totaling $515,000. Other costs involved were variable costs ($765,000 total) and direct fixed costs ($253,000 total). Additionally, the breakeven point in revenue was $1,533,000. It was also determined, in that year, that a minimum of 21 concerts must have been performed to reach each individual dance concert’s breakeven point. Breakdown of Each Concert The most successful concert was the Christmas Spectacular. It…show more content…
The first thing we recommend is diminishing all Jazz and Tap Dance concerts. By simply canceling these concerts, the company would have saved the $41,750 loss. However, we recommend that the company replaces this with a different type of popular dance; scheduling the new genre no more than five times, in order to receive feedback. The next suggestion is to increase the number of both Hip-hop Performance and Modern Dance by two, enabling one performance of each per month. The last proposal is to increase the price of tickets for the Christmas Spectacular for both the lower and upper orchestra sections. The lower section should be increased by $25, and the upper section by $10. Due to the popularity of the Christmas Spectacular, the increase in price should not affect ticket
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