Kristen Tranmal’s Managerial Accounting class at Globe University-Madison West completed a unique and useful applied learning project during Summer Quarter 2014. Student, Michelle Miller created a break-even analysis for the Williams Bay Fire Department’s Annual Chicken Roast.
The Williams Bay Fire Department (on the shores of Lake Geneva, Wisconsin) has been doing the chicken roast for years without actually analyzing the profit margin for the event. Basically the department would decide on a certain number of tickets to sell and when the chicken ran out, the event was over. In a typical year the department would sell about 500 tickets at $10 a meal. The price for the dinner was also something that hadn’t changed in a very long time.
The data from past fundraisers was sent to the class in the form of a basic table in a word document. Based on the initial figures, Michelle began to think that the fire department needed to reassess the cost of each dinner, the potential earnings of the event, and the amount of tickets actually sold.
To do this she created a break-even analysis for them. A break-even analysis is used to determine the point at which revenue received equals the costs associated with receiving the revenue. The fire department can use the tool to help them re-estimate future cost increases for the chicken dinner. It is a simple analysis, and, once set up, can be used for the fire department’s Spaghetti Sunday fundraiser and other events. They can also plug in the amount they would like to raise and run the break-even analysis in the opposite manner to see how many tickets they need to sell to reach their fundraising goal.
The break-even analysis and accompanying graphs (often visuals tell a story more effectively than numbers, especially when addressing non-accountants) gives the fire department the means to present profits to the village board in a professional manner. The basic spreadsheet created by Michelle can also be shared with other non-profits in Williams Bay for their fundraisers, as the final outcome can be easily adopted by any organization.
Michelle Miller, who completed the project with the help of instructor Tranmal, is a first quarter accounting program student from Oregon, Wisconsin. She is returning to school in order to obtain a promotion at work. Instructor Tranmal commented that “Michelle is very conscious with what she is working with and wants to make sure that the end results can actually help the fire department. By working with actual, real-life data, the concepts seem to click a lot faster in class.”
Michelle presented the break-even analysis to the Williams Bay Fire Department, along with a detailed report, including instructions on how the department can use the analysis going forward. This project tied directly into the content she was learning in the course work and puts a real-life spin on the material. It also benefits the fire department in a very practical and useful way.
Written by Globe University-Madison West Campus Librarian Amy O’Shea