Exam 7: Financial Management, Operational Decision Making, and Budgeting

A soccer match has an audience of 40,000 and 30,000 spectators are required to breakeven. Each ticket costs $40, which of the following best describes the margin of safety:

The fixed costs of a swimming pool are $10,000 per month and each swim generates $10 in revenue and has a variable cost of $2. How many swims are needed per month to breakeven?

If a product costs $24 and can be sold for $60 what is the contribution to sales ratio?

Operational decision making is concerned with:

The principal cause of business failure is:

The majority of costs that sport facility managers will encounter are fixed. What are the implications for managers working in the industry?

Businesses need to make a profit in order to:

Explain what is meant by the breakeven point and the margin of safety. How does knowledge of these concepts help sport facility managers?

Is budgeting an isolated mechanical exercise or an integral part of the business planning process?

If a budget does not balance, what steps, if any, can be taken to bring income and expenditure into line?

Consider a sports facility that you are familiar with. Can you think of at least 10 areas of running the business where financial skills are necessary for effective performance? What questions should a sport facility manager ask themselves as related to the level of skill they have in each area?

A vendor sells hotdogs for $5 and the cost of sales is $2, how much contribution does the vendor generate when 150 hotdogs are sold?

The fundamental rule of business is that the selling price must be:

When actual financial performance is worse than the budget you can take corrective action by :