Tour2201 Introduction To Event Management Assessment Answers

Answer:

Explanation of the Assumptions:

The explanations to the assumptions follows that the revenue derived from the occasion with little amount of overhead. This provides the occasion with the speedy break-even point with little amount of overhead (Akintoye, 2014). Prior to arriving at the net profit tax rates are taken into the considerations for information. The event will not carry any loan burden which would be effected by the rate of tax.

An event planning requires the use of the resources that are available at lower cost. As it has been noted in the below stated table the event is anticipating to spend less on the overhead instead of the other event planners with an outside office or with an office space in their own facility (Johansson & Siverbo, 2014). The budgetary plans have been made to allow the event company to spend their fund in a creative manner along with the expansion in the areas with appropriate opportunity.

The anticipated net profit situation of the event is considered to be better as the sponsors, merchandise sale and vendors made up the profit of the event (Veal & Burton, 2015). The event is operating with no amount of debt and this will help in increasing the net worth higher.

Budgeted Expenditure:

The budget for operations comprises of all the non-capital revenues and expenditures. The forecast is based on the information derived from the other music concert. The forecast made are merged with the unrestricted forecast of the budget and the same is adjusted with the event budget forecast for the purpose of consistency (Klychova et al., 2014). As indicated from the current projected budget, the consolidated budget operations comprise of the numerous types of revenues and expenditure. It can be considered in relation to the event administrative areas as described in this section along with the type of fund.

The expenses categorized in this budget represents site expenditure, expenditure on refreshments, publicity and prize distribution expenditure (Otley, 2015). Additionally, expenses are also incurred in the areas of entertainment, Decorations and other miscellaneous expenses comprises of the cost on photocopying, postage, stationary supplies and fax service.

The income streams which will form the source of revenue from the budget, the admission of guest will be based on the tickets with each tickets is priced at a cost of $250. An estimated number of 700 guest will be arriving at the music event. The exhibitors and the vendors will be charged a fee of $300 for setting up their shops with an estimated revenue of $30,000 is anticipated to be generated from such vendor shop. The event will be selling merchandise products in the form of glassware, badges. Additionally, the event will also be selling T-shirts, polo shirts and caps with an expected revenue of $28,750 will be generated from such sale of merchandise. The expected amount of total income is anticipated to be generated around $2,58,750 and the total amount of expenditure is anticipated to stand around $129,700.      

Budgeted Income:

Break-even analysis:

The break-even analysis has been made based on the assumptions that the net amount of revenue derived after deducting the variable and fixed cost. The cost is restricted to minimal equipment with sufficient amount of staff to hold the event and the contracted suppliers will be supplying the additional requirement of the business for the planned events.

Table 1: Representing Break-Even Point

(Source: As Created by Author) 

Reference List:

Akintoye, I. R. (2014). Budget and Budgetary Control for Improved Performance. European Journals of Economics, Finance and Administrative Science, (12), 9-11.

Johansson, T., & Siverbo, S. (2014). The appropriateness of tight budget control in public sector organizations facing budget turbulence. Management Accounting Research, 25(4), 271-283.

Jones, M. (2014). Sustainable event management: A practical guide. Routledge.

Klychova, G. S., Faskhutdinova, ?. S., & Sadrieva, E. R. (2014). Budget efficiency for cost control purposes in management accounting system. Mediterranean journal of social sciences, 5(24), 79.

Otley, D. (2015). in Management Control. Critical Perspectives in Management Control, 27.

Veal, A. J., & Burton, C. (2015). Research methods for arts and event management.