Sales And Marketing Department Assessment

Introduction of case

As an intern, Crystal hotel pty limited’s overall performance has been evaluated in the report in order to offer a base to the management of the company to reach over a conclusion about the performance of the company. This report focuses on various cost, financial and accounting tool to improve the overall level and position of the company.

In this case, the membership project of new gym has been measured. The gym is offering two options to the guest of the hotel which are basic membership and full membership of gym. The chargeable amount on both the packages is also different. The calculations of total profit from this project are as follows:

	Membership (Basic 39/month, Full Package 80/month)
Membership Project	Cash Outflow Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Cash Inflow	Net Cash Flow	Tax	After Tax CF	PV Factor	NPV
Year 0	$35,350		-$35,350	$0	-$35,350	1	–                             35,350
Year 1	$808	$222,200	$221,392	$66,418	$154,974	0.9259	143,495
Year 2	$808	$238,481	$237,673	$71,302	$166,371	0.8573	142,637
Year 3	$808	$256,212	$255,404	$76,621	$178,783	0.7938	141,924
NPV							$392,705

(Bonner, 2008)

On the basis of the table, the net present value of new gym of the business is $ 3,92,705 which explains that if the hotel would invest into the project than the cash inflow of the business would be $ 3,92,705 higher than the cash outflow of the business. It brief that the hotel should make an investment into the new gym project though it is also recommended to look over the other external factors to improve the level (DRURY, 2013).

The promotional activities of hotel have been calculated in the case. The hotel is planning to open a wellness centre and for that, a promotional event has been has been planned by the business.  the market feasibility of the wellness centre has been evaluated and it has been found that the various new items would be required to buy by the hotel to conduct the promotional event. The budget for the event is $ 15,150. However, through measuring the event and the other factors, the below budget has been developed. The total budgeted expenses of the business are $ 14,548 which is lower than the budget of the business and explains the better performance of the business.

	Promotional Budget
Item	Price(excl GST)	GST	Price (incl GST)	Quanity Required	Total Budgeted Value
The Brisbane times (Quarter page strip)	1132	$113.20	$1,245	2	$2,490
Digital foyer advertising (weekly rate)	250.00	$25.00	$275	4	$1,100
Bus shelter poster (trail pannel)	$550	$55.00	$605	2	$1,210
Digital Billboard (medium)	2500.00	$250.00	$2,750	1	$2,750
Printed Billboard	$600	$60.00	$660	2	$1,320
Flyers	$295	$29.50	$325	9	$2,921
Retail advertising	$358	$35.80	$394	7	$2,757
TOTAL	$5,685	$569	$6,254	27	$14,548

(Zimmerman & Yahya-Zadeh, 2011)

Further, the hotel’s marketing team has approached that a promotional event should be run by the business. The department has initiated the total expenses of the event and according to the feasibility on the market, they also added that the per ticket could be sold in $ 80. The total variable and fixed expenses of the business are $ 35 per ticket and $ 45000 as total. The break-even point of the event has been calculated to measure that whether the promotional event is profitable for the company or not. The below is the calculations of CVP analysis:

CVP ANALYSIS
CM	$      45.00
CMR	56.25%
Break-even (units)	1,000
Break-even ($)	$80,000.00
Number of units of service required to earn a target net profit of $ 100, 000	3222

Task 1: Equipment Decision-Making

(Weil, Schipper & Francis, 2013)

On the basis of the evaluation, it has been found that the business is required to sell around 1000 tickets to reach over the point where the revenue would cover all the expenses of the business. Further, if the company wants to earn $ 1,00,000 through this event then it is required to sell 3,222 tickets.

In this case, the new projects (subscription or licence) have been evaluated. The gym company has two options, wither to take the subscription of new software or buy the software permanently. The charges of both the packages are different. The calculations of total profit from this project are as follows:

	Licence
Membership	Cash Ouflow	PV Factor	PV of Cash outflows
Year 0	$6,900	1	$6,900
Year 1	$300	0.925925926	$278
Year 2	$309	0.85733882	$265
Year 3	$318	0.793832241	$253
TOTAL	$7,827	$4	$7,695

	Subscription
Membership	Cash Ouflow	PV Factor	PV of Cash outflows
Year 0		1	$0
Year 1	$2,172	0.925925926	$2,011
Year 2	$2,237	0.85733882	$1,918
Year 3	$2,304	0.793832241	$1,829
TOTAL	$6,713	$4	$5,758

(Edwards, 2013)

On the basis of the table, the net present value of licence and subscription of the software is $ 7,695 and $ 5,758 which explains that if the hotel would take the subscription than the total amount would be higher against the licence proposal. It brief that the hotel should take the subscription of the software rather than buying it permanently due to higher expenses (Horngren, 2009).

The promotional activities of Venue have been calculated in the case. The hotel is planning to open a wellness centre and for that, a venue s required by the business. The case focuses on that budget only.  The market feasibility of the wellness centre has been evaluated and it has been found that the various new items and services must be planned by the business for the event. The budget for the event is $ 20,500. However, through measuring the event and the other factors, the below budget has been developed. The total budgeted expenses of the business are $ 20,244 which is lower than the budget of the business and explains the better performance of the business.

	Venue Costing
Item	Price(excl GST)	GST	Price (incl GST)	Quantity required	Total Cost
Chair cover hire	$6	$0.60	$7	300	$1,980
Gift hampers	$13	$1.30	$14	10	$143
Open entertainment	$35	$3.50	$39	3	$116
Balloon Canterpieces	$4	$0.35	$4	30	$116
Guest gifts	$9	$0.90	$10	300	$2,970
Food	$30.08	$3.01	$33	300	$9,926
Beverages	$10	$1.00	$11	300	$3,300
AV system and staging		$0.00	$0		$0
Event staff rate	$22	$2.20	$24	$70	$1,694
					$20,244

(Deegan, 2012)

Further, the business has got a order of a corporate meeting in the conference room. The department has planned the total expenses of the meeting and according to the evaluation, hotel would charge $ 100 per person. The total variable and fixed expenses of the business are $ 40 per person and $ 10,000 as total. The break-even point of the event has been calculated to measure that whether the proposal of the company is good or not. The below are the calculations of CVP analysis:

CVP ANALYSIS
CM	$      60.00
CMR	0.60
Break-even (units)	167
Break-even ($)	$16,666.67
Number of units of service required to earn a target net profit of $ 50, 000	1,000

(Deegan, 2013)

On the basis of the evaluation, it has been found that the business is required to sell entertain 167 people to reach over the point where the revenue would cover all the expenses of the business. Further, if the company wants to earn $ 50,000 through this event then it is required for the company to entertain 1000 people.

Conclusion:

Through the evaluation on crystal hotel pty limited and various cases of the hotel, it has been found that various tools of accounting, costing and finance are quite important for the business. Every technique is different and offers the different result to the company to make different outcome and conclusion.

Reference:

Bonner, S. E. (2008). Judgment and decision making in accounting. Prentice Hall.

Deegan, C. (2012). Australian financial accounting. McGraw-Hill Education Australia.

Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia.

DRURY, C. M. (2013). Management and cost accounting. Springer.

Edwards, J. R. (2013). A History of Financial Accounting (RLE Accounting). Routledge.

Horngren, C. T. (2009). Cost accounting: A managerial emphasis, 13/e. Pearson Education India.

Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.

Zimmerman, J. L., & Yahya-Zadeh, M. (2011). Accounting for decision making and control. Issues in Accounting Education, 26(1), 258-259.