Roller Coaster Magic Company

1
Roller Coaster Magic Company

• Andrew Welsh
• BISM 2100/03

2
Roller Coaster Magic

• The Roller Coaster Magic Company has agreed to
  open a concession stand in the first of April
  the stand will sell hotdogs, chips and soft
  drinks. This presentation provides an annual pro
  forma cash budget requested by the owner of the
  concession stand.

3
Assumptions Provided

• Concession stand will be open 12 hours a day, 6
  days a week. The amusement park is closed on
  Monday.
• The concession stand requires one hourly employee
  and one manager for each hour open. On Saturday
  and Sunday the owner requires two hourly
  employees and one manager to be on duty.
• The owner predicts approximately 8 customers per
  hour Tuesday through Friday and 16 customers per
  hour on Saturday and Sunday.
• Sales are projected to increase 65 in the months
  of July and August and decrease by 25 during the
  months November to February.

4
Assumptions
5
Results from Pro-Forma Budget
6
Roller Coasters this extreme require some
refreshments from the concession stand.
7
Recommendations by the Owner

• The owner is considering selling beer at the
  concession stand for 3.00 each (0.56 cost of
  goods). It seems reasonable that every fourth
  customer would purchase beer with the exception
  of Sundays when it is not permissible to sell
  beer. Beer sales will also decrease the amount of
  soft drinks sold. For every beer sold, one less
  soft drink has been estimated. It will cost the
  owner 3500 to purchase the beer license from the
  county the monthly insurance would rise to 300
  per month.
• A marketing agency has offered services to the
  concession stand and guarantees 2 extra customers
  per hour. This will cost the owner 1000 per
  month.

8
Results from Pro-Forma Budget Recommendation 1
9
Results from Pro-Forma BudgetRecommendation 2
10
Recommendations 1 and 2 in comparisonRevenues
and Expenses
11
Recommendation 1 and 2 comparisonNet Incomes
12
Conclusion

• Based on the information provided by the
  owner, the results for recommendation 2 produced
  much higher sales and net profit than
  recommendation 1. The increase in advertisement
  would improve the number of customers at the
  concession stand. Acquired income from the
  concession stand would allow the owner to invest
  in more products, services and maintenance
  options for the company.

13
Roller Coaster Magic Company
Hungry for excitement. Hungry for refreshments.