Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann

Exercise 11

Hans Burgstaller, marketing and sales manager of Columbus Cable TV, Inc., retained a new consultant in 2013 to plan and monitor the annual fall advertising campaign that was designed to increase the number of subscribers and persuade subscribers to move to higher priced services. While the numbers and service profiles in Exhibit 5.2 show improvements for October 2012, this might be typical of such campaigns. Mr. Burgstaller wonders how the results for October 2013 compare with last year. New subscribers for October 2013 for basic, super, and premium service were 1,234, 296, and 599, respectively, and lost subscribers were 450, 563, and 257, respectively. Net changes in level of service were (120), (15), and 135.
Required:
a. Prepare a report for Mr. Burgstaller comparing October 2013 with October 2012, using the layout shown below.
COLUMBUS CABLE TV, Inc.,
For October 2013 October 2012

b. Evaluate the effect of the fall advertising campaign on the acquisition of new subscribers, loss of subscribers, and changes in the service level. What conclusions would you suggest to Mr. Burgstaller?
c. Which principles of reporting do your answers illustrate? Explain.