Craddock Cup Case Essay

Craddock Cup case study Question Number 1 In determining whether to keep or drop the Craddock Cup, the overhead expense allocations of City field rental, CYSL salaries and CYSL rent should be revised. In determining whether to keep or drop the Craddock Cup, the allocation of City filed rental fee of $1200 from CYSL to the Craddock Cup should be eliminated. CYSL rented 10 soccer fields from the city for 40 weeks a year for a total fee of $48000. However, even if the Craddock Cup was dropped

Concepcion                                   The Craddock Cup: Questions: Spring 2015 The purpose of this case is to illustrate the importance of understanding cost behavior in calculating the profit/contribution of the Craddock Cup. Within this context, the case asks whether the tournament should be continued, expanded or dropped. In addition, the case provides a vehicle to discuss allocation procedures and the concept of sunk costs. Finally, the case furnishes an opportunity to develop cost-volume-profit

1. The Craddock Cup in its current form should be continued in order to maximize CYSL’s profits. Although it looks as though the Cup is incurring a loss, we need to analyze the relevant and irrelevant costs to truly determine the financial impact of discontinuing the cup. Although total expenses are $53,538, we need to eliminate the irrelevant, or unavoidable, costs when deciding whether the Cup should continue. In this case, the irrelevant, unavoidable costs include Rivaldo’s salary allocated

The purpose of this case is to illustrate the importance of understanding cost behavior in calculating the profit/contribution of the Craddock Cup. Within this context, the case asks whether the tournament should be continued, expanded or dropped. In addition, the case provides a vehicle to discuss allocation procedures and the concept of sunk costs. Finally, the case furnishes an opportunity to develop cost-volume-profit analysis within the context of relevant costs and revenues. Questions: 1